Public Bill Committee

[Mr David Crausby in the Chair]
Written evidence to be reported to the House
EN 37 National Association of Rooflight Manufacturers
EN 38 Sustainable Uist
EN 39 Public and Commercial Services Union
EN 40 Ovo Energy

New Clause 1  - Carbon emissions in local authority areas

‘(1) The Committee on Climate Change shall advise the Secretary of State about the contribution to emissions reduction needed in local authority areas to meet each national carbon budget.
(2) The advice given under subsection (1) should include but not be limited to—
(a) carbon emissions from a local authority’s own buildings and operations;
(b) carbon emissions from the local area;
(c) local renewable energy generation;
(d) national carbon reduction initiatives delivered at the local level.
(3) The Committee on Climate Change may advise the Secretary of State on local level adaptation to climate change.
(4) The Secretary of State must lay before Parliament a response to the advice given by the Committee on Climate Change under subsection (1) or (2), within six months of receiving the advice.
(5) For the purposes of this section—
(a) “budgetary period”, “carbon budget” and “national authorities” have the same meaning as in Part 1 of the Climate Change Act 2008;
(b) “local authority” means a county council or district Council in England, or a London Borough Council, or the Council of the Isles of Scilly.’.—(Luciana Berger.)

Brought up, read the First time, and Question proposed (this day), That the clause be read a Second time.

Question again proposed.

David Crausby: I remind the Committee that with this we are discussing the following:
New clause 2—Climate change strategy for local authority areas—
‘(1) Local authorities must develop and promote a climate change strategy for their local area.
(2) In preparing the strategy, local authorities must take into account any advice given by the Committee on Climate Change on local action to meet carbon budgets.
(3) In preparing the strategy, local authorities must consult with local residents, businesses, social enterprises and co-operatives and other institutions.
(4) Local authorities must publish and promote their local climate change strategy, publish an annual report on progress towards carrying out the strategy and engage with local citizens and community groups.
(5) The Secretary of State must work with local authorities and the Local Government Association (LGA) to assist them in producing and implementing their climate change strategies, taking into account any relevant advice from the Committee on Climate Change.’.
New clause 28—Sustainable energy plans—
‘(1) A local authority must consider whether the drawing up and publishing of a sustainable energy plan would have either of the following effects, namely to—
(a) increase its efficiency regarding; or
(b) in any other way assist with
the discharge of its functions.
(2) If in the opinion of a local authority the drawing up and publishing of a sustainable energy plan would—
(a) have either of the effects specified in subsection (1); and
(b) assist with the purposes of this Act
then it must draw up, publish and implement a sustainable energy plan.
(3) Without prejudice to the generality a plan must specify the steps that the local authority proposes to take to promote—
(a) energy efficiency;
(b) microgeneration;
(c) renewable energy;
(d) combined heat and power; and
(e) cost effective action with or by residents, local organisations or businesses that would assist with the reduction of greenhouse gases, the achievement of energy security or the mitigation of fuel poverty.
(4) A plan prepared by a local authority may—
(a) request such new functions as in the opinion of the council would enable it to make a greater contribution to achieving the objectives specified in subsection (2); and
(b) make a recommendation to the Secretary of State for a transfer of functions from another body to itself provided that no such recommendation may be made unless the council has consulted the person to whose functions it relates.
(5) Within 6 months of receiving any request pursuant to subsection (4)(a) or recommendation pursuant to subsection (4)(b) the Secretary of State must—
(a) either adopt and implement, or take the necessary steps to commence the process of implementation,
(b) or reject
the request or recommendation and in either case shall give reasons for his decision.
(6) Where any functions are conferred or transferred pursuant to this section, the Secretary of State shall ensure that the monies necessary for the discharge of those functions are provided or transferred.
(7) Any principal council on which functions are conferred or to which functions are transferred under this section must determine how the functions are then performed.
(8) Where the Secretary of State is spending money in an area covered by a plan in order to achieve any of the objectives specified in section (1), and in this opinion—
(a) any measure contained in a plan is a more efficient way of achieving his objectives; and
(b) offers better value,
then he shall provide resources for the principal council to implement those measures in its plan.
(9) Where any person submits to his local authority a proposal that would in the opinion of the authority be a cost effective method of assisting with—
(a) the reduction of greenhouse gases, or
(b) the achievement of energy security, or
(c) the mitigation of fuel poverty,
the authority must include that proposal in any plan prepared pursuant to this section or, if it has not prepared such a plan, implement the proposal.’.
New clause 29—Communal schemes—
‘(1) Local housing authorities shall be empowered to arrange, with green deal providers, energy saving schemes that cover the whole or a part of housing estates, roads, districts or other local communities. They will negotiate on behalf of improvers so as to obtain savings that arise from economies of scale, which will be passed on to individual improvers.’.
New clause 46—Local carbon budgets—
‘(1) The Secretary of State shall—
(a) within 12 months of this Bill receiving Royal Assent, report to Parliament with proposals for the introduction of a system of local carbon budgets consistent with meeting national Climate Change Act 2008 carbon budgets;
(b) introduce the local carbon budget system to begin at the start of the second national carbon budget period;
(c) report to Parliament annually about the contribution of local strategies to meeting UK Climate Change Act carbon budgets;
(d) determine circumstances in which two or more councils may develop a joint strategy for cutting greenhouse gas emissions in their areas.
(2) The Secretary of State shall request advice from the Committee on Climate Change about—
(a) the scale of action need in local authority areas to help meet UK Climate Change Act carbon budgets;
(b) climate mitigation and adaptation policies that are effective when locally coordinated by councils;
(c) ensuring that individual local carbon budgets are both appropriate for the circumstances of different local areas and that the totality of all local carbon budgets is consistent with the requirements of subsection (1)(a).
(3) The proposals to be reported under subsection (1) shall include a duty on local authorities to—
(a) develop a strategy, through consultation with those groups and individuals listed in subsection (3)(b), for cutting greenhouse gas emissions across their local area in line with meeting their local carbon budget;
(b) work in partnership with local residents, businesses and stakeholders, including social enterprises and co-operatives, community groups, schools and hospitals, and other institutions in drawing up and implementing the strategy detailed in (3)(a);
(c) wherever possible, develop proposals consistent with a reduction in greenhouse gas emissions in their local authority area of 90 per cent. by 2030, compared to 1990 emissions levels;
(d) publish and promote an annual report on progress towards meeting their local carbon budget; and
(e) request additional powers or financial support from the Secretary of State as they consider necessary to meet the duty set in section (2), which shall not be unreasonably withheld.
(4) Any regulations or order made under section (1) shall not be made unless a draft has been laid before, and approved by, resolution of each House of Parliament.’.

Luciana Berger: It is a pleasure to serve under your chairmanship in the last sitting of the Committee, Mr Crausby.
At the end of this morning’s sitting, I was saying to the hon. Member for Richmond Park that many councils already undertake environmental activities. I referred earlier to the Prime Minister’s constituency, and during lunch time I found a quote from the cabinet member for environment in West Oxfordshire district council, who said:
“I’m happy to see the Government introduce targets on the environment… It is helpful if they are mandatory—it means no wriggle room and everyone in the council pulling together.”
Ultimately, the issue is so important—some issues in society, such as child protection, are very important—that every council must do its bit if we are to achieve our national climate commitments. Councils that are not already doing it cannot use the excuse that it is too difficult or that there is too much responsibility and onus, which is why new clauses 1 and 2 are so important.

Zac Goldsmith: I totally agree with almost everything the hon. Lady said. Local authorities have to get involved, but councils that are already engaged, of which examples have been given, are up for the plan because they are already engaged. If a council is not engaged, being required to come up with a review, a strategy or a plan will allow them, as ever, to do straightforward, routine box-ticking. That is not what will drive councils to join the examples of best practice; I have seen no evidence of that.
I am not opposed to the new clauses, as it happens; I just do not believe that they will be the difference between success and failure. What will make a difference is a strong national framework. We see the beginning of that in the Bill and the green investment bank will, one hopes, provide a lot of fuel.

Huw Irranca-Davies: What the Conservative cabinet member was just quoted as saying was effectively a testament to “Vote blue, go green”—

Gregory Barker: Hear, hear!

Huw Irranca-Davies: Indeed. On that basis, what is the difference between the application of the new clause to the local context and the fourth carbon budget that sets a national direction? It is the same principle, but taken down to local determination.

Zac Goldsmith: The difference is that it is very hard to know what belongs in the local area and what does not. I question the figure of 80% that we heard earlier; I think it is more like 100%. Every emission released in this country happens within one local authority or another. If a local authority has a large coal plant or a large road going through its area, does that count in the local budget? Perhaps the Opposition can answer that.

Luciana Berger: If it is 100%, is that not even more of reason why local councils and local authorities should be under an obligation to meet our national target for reductions?

Zac Goldsmith: The hon. Lady has misunderstood, but perhaps I was not clear enough. One hundred per cent. of emissions happens in local authorities. In many cases, those emissions will not be reduced by local action, but by having a strong national framework. With the landfill tax, a heavy-duty national stick has been applied throughout the country, which has resulted in local authorities finding ways to minimise their waste. It is not applied by the Government in a bespoke manner for each and every local authority; it is interpreted by local authorities.
The large signals sent by the Government are what will make a difference: the sticks and carrots across the board, the green deal, the green investment bank, electricity market reform—we hope to see it in the next few months and it may be a game-changer if the Government are as ambitious as we are led to believe they will be—feed-in tariffs, renewable heat incentives and, I hope, more action from the Department for Transport, which is not yet doing as much as it should. Those things will lead to a rapid reduction not only in our dependence on overseas fuel, but in our emissions.

Luciana Berger: The hon. Gentleman says that he hopes that other Departments will do something in the future and he anticipates that they will, but do we not have the opportunity to do something today that will have a massive impact throughout the country?

Zac Goldsmith: Absolutely, and that is exactly what we are doing under this magnificent Bill, which I believe is a great step in the right direction. That is not to say that it cannot be improved. I take this opportunity to say that our proceedings are probably the only example since the election of a scrutiny Committee actually engaging in real scrutiny, and that is a testament to the Department. It has gone out of its way to find the most awkward people imaginable to apply themselves to the job of scrutiny, and that is a great thing. It is a template and adds weight to the argument that the hon. Member for Brighton, Pavilion has made many times for elected members of Bill Committees. I accept that I am well off-track, Mr Crausby, but if we did have elected members of Committees, we would have much more engaged discussions than is usually the case in such proceedings.
I am a fan of the Bill. It is a step in the right direction. Many of the other examples of action that I have provided are already in the pipeline. The renewable heat incentive and feed-in tariffs are not futuristic aspirations; they are happening. The green investment bank is not as ambitious as many people hoped, but it is many times more ambitious than most people expected. Electricity market reform in the next few months could be—I think will be—an absolute game changer. Such measures will put a price on pollution. There will be big incentives for energy reduction and energy efficiency, and that will necessarily lead to the action at local authority level for which Opposition Members are calling.
I do not believe that the strategies, the reports, the processes and the bureaucracy entailed in the new clauses would make the slightest difference. I do not object to their existence. If the Minister accepts them, that is fine, but they are not proposals that personally excite me. Yes, I signed the pledge before the election because I believe in the direction in which we are going and in the aspirations behind the new clauses, but it is hard to see them making the slightest difference. We seem to be talking about the process, not the outcome and the substance.

Ian Lavery: The hon. Gentleman mentioned the EMR, which will be happening in the next few months. What main part of that will have an impact on local authorities?

Zac Goldsmith: I can give the hon. Gentleman one example. Clearly, EMR has not happened yet, but I hope that energy reduction will be put on a par with energy generation, so that when local authorities engage in or organise energy contracts, there will be a direct incentive for them to pursue contracts that have energy efficiency at their heart. If that happens, the dynamic will change completely. Instead of companies having a direct incentive to sell as much energy as they can, they will have an incentive to sell as little energy as they can, albeit enough to power homes, hospitals and God knows what else to keep the lights on. They dynamic will change so profoundly that that in itself will probably be the biggest single thing that the Government can do to start weaning us off dependence. The reform must be ambitious, and I believe that it will be ambitious.

Caroline Lucas: It is interesting that the hon. Gentleman is so sceptical about what can be achieved at local level, yet so hopefully ambitious about what will happen at national level. There seems to be a lack of logic. Why has he so much ambition for national level, but not for what will happen at local level? The new clauses are about empowering local authorities to take the action that will be needed at local level if those national aspirations are to come true. They are not about red tape, which can be used to characterise measures in a lazy way.

Zac Goldsmith: Perhaps I have misunderstood, but I do not think that the measures are about empowering local authorities; I think they are about providing direction for local authorities, which I shall come to in a second. I am certainly not sceptical about what can happen locally, but I am sceptical about targets because it is unclear what is the responsibility of local authorities and what is the responsibility of the Government. Where can the local authorities make a difference, and where can they not? Because that is necessarily ambiguous, it is hard to imagine what sanctions should be put in place.
My original question about sanctions at our previous sitting was not mischievous. There is not much point in having specified and prescriptive targets and goals unless we also have sanctions; otherwise, they will be ignored. It is hard to imagine how we can work out what sanctions to apply to local authorities for exceeding the budget that is set for them, given that we do not even know which parts they will have the power to deal with, and which parts they will not. I can imagine the policy becoming an absolute bureaucratic nightmare. It will not have the desired outcome. Local authorities that do not want to engage will not engage. Most local authorities want to engage, but they have no idea how to do so.
We have heard examples of local authorities blazing a trail. I spoke to a council leader, Louise Goldsmith, this morning—she is not a relation of mine, although there probably is a link about 500 years back. She gave wonderful, inspiring examples of what is happening in her local authority. We need to learn from those examples. We will hear from the Minister later, but what I hope we will be able to do is facilitate a process whereby best practice is centralised, so that we develop a bank of best practice that local authorities can draw on, because I do not think that the expertise exists in many local authorities to pursue the types of measures that we are talking about.

Huw Irranca-Davies: I think the hon. Gentleman’s heart and soul are with us, but his political head is telling him, “Whatever you do, don’t go with them over there.” I suggest to him that the expertise does reside in local authorities. Because they have, not direct levers of power, but influence over waste policy, transport, industrial development and so on, they can make decisions such as the one my local authority made to have Tata Steel, one of the most intensive energy users, on its doorstep, but to adopt compensatory measures to minimise its carbon footprint, which it has done so very intelligently. All the new clause would do is to allow that sort of local determination in balancing the books on green matters.

Zac Goldsmith: I do not want to be misunderstood. I recognise that there is a lot that local authorities can do. What I do not believe is possible is to identify exactly how much a local authority must do about things over which it has control and then apply targets and consequently sanctions. I do not believe that that is possible. I think that that is messy, bureaucratic and complicated, and it will take us down the wrong path. I just do not think that approach works.
My local authority is Richmond upon Thames and part of its area is in my constituency. The authority has been very keen in the last few years to reduce emissions, and it introduced a scheme to try to reduce emissions from cars. It turned out to be one of the least attractive, clumsiest and most unpopular environmental initiatives that I have ever seen, and it absolutely exhausted local people’s appetite for green initiatives. It was very well intentioned and it was absolutely the right aspiration, but it was completely the wrong idea and the effect was that we took a big step backwards. Why? Because car emissions cannot be addressed locally. It is an issue that we need our Government to address and indeed it must also be addressed at the level of the EU.
I very much hope that the coalition Government will finally take on the car industry and push for lower emissions standards. It is not something that we have seen yet, but I very much hope that it will happen. That is what needs to happen. It will not be down to local authorities to deal with it.

Huw Irranca-Davies: The hon. Gentleman seems to be arguing against local determination. We accept that in local determination—in fact, in localism as a concept—errors will be made, including political errors and judgments on policy. However, setting local authorities a target and then saying to them, “You go ahead and determine how you will do that,” is what local democracy is about. It seems that he is now arguing against local determination of how local authorities can achieve reductions in their carbon footprint.

Zac Goldsmith: I think that it is about the national approach. Let us go back to the landfill tax, which for the first time made waste into a liability—a heavy liability. Local authorities could have chosen to ignore that and pay out vast amounts of what they raised through council tax, in order to ignore the potential savings available to them by engaging in clever waste policy.

Alan Whitehead: I think the hon. Gentleman is confusing targets and budgets.

Zac Goldsmith: I am talking about the whole collection of new clauses.

Alan Whitehead: I understand that and I was hoping to catch your eye, Mr Crausby, in a moment to expand on that, but landfill tax is essentially a budget for landfill; it is not a target. Essentially, that is why it has worked, because it says, “This is what you can landfill and these are the decisions that you can make relative to it, and you must work within a budget for your landfill.” I am with him on that, but I think that what he is saying actually supports our argument, rather than opposes it.

Zac Goldsmith: I am not sure that I completely agree with that interpretation. The difference is that the landfill tax exists, and local authorities can either minimise their exposure to it or they can ignore it, but if they ignore it, there are financial penalties. I do not think that it is a budget in the normal sense. My original point is not about whether it is a budget, or a target or anything else, but that it is a national disincentive that was created to turn waste into a liability. That is the sort of measure that we need across the board. We need incentives and disincentives to push us in the direction that we need to go in.
My concern is not that local authorities should not be required to do everything they possibly can to minimise their emissions. My concern is that the tools set out in the new clauses will not deliver that outcome, because they are just too difficult to work out. I can imagine that as a result of the new clauses being accepted, we would have to develop an ancillary carbon Government, just to monitor the progress in the local authorities. There are easier ways.
I am being more strident than I had intended to be. I do not believe that the proposals are the solution. I am interested to hear what the Minister has to say. I hope that in addition to the bank of best practice ideas, which I know would be useful for my local authorities and, I am sure, for many others, the Minister will pursue the negotiations and discussions with the Committee on Climate Change, and take advice on the implications of its providing each local authority with an indication of what its contribution to the reductions should be. That would be a fascinating exercise, assuming that it was not too bureaucratic and expensive. I hope that we shall be able to return to the matter on Report.

Huw Irranca-Davies: Knowing that there is another stage to be gone through in consideration of the Bill, would the hon. Gentleman be more comfortable with a wider enabling power, at the discretion of the Secretary of State, which, subject to the recommendations of the Committee on Climate Change, could be put into place? If the difficulty is with the parameters of the new clause, perhaps he would welcome an alternative amendment, which would give the Secretary of State at least that enabling power?

Zac Goldsmith: I know that we will have an opportunity on Report for a version of the new clauses to be brought in. The Minister is nodding his head. That is news to me. My understanding was that on some of the issues where there is not complete disagreement with the principles, notwithstanding disagreement over the wording, there is an opportunity on Report for the Minister to table amendments. I know that the Minister is having discussions with the Committee on Climate Change, particularly on new clause 1, about carbon budgets. I hope that that discussion will follow. We shall see what happens on Report.
I have misunderstood the Minister and I hope that he will explain the possible ramifications of his discussions with the Committee on Climate Change. Where could they lead, and how do they relate to Report? I think that I have misunderstood the process. I shall stop there, and waited excitedly for the Minister’s comments.

Alan Whitehead: I do not quite understand certain elements of the debate. In Climate Change Act 2008 we set a number of targets. We subsequently went substantially beyond those in the architecture of the Act to make things happen. In One can generally characterise targets as similar to saying, “I want to lose a stone in weight.” That is my target. Then the question is “How do I go about it?” What I may do then is give myself a diet, or a budget, to achieve that target. That is what was done with the Climate Change Act. We have our five-year carbon budgets, which are not targets. They constrain the overall envelope of what can be done; within that, it is possible to move around considerably, but it provides the shaping for the way forward. We produced a national allocation plan—difficult to undertake, but we did it nevertheless—for large parts of UK industry and electricity producers on what their emissions could be and how they would need to trade them to stay within the budget allocations they had been given.
That is how we have done it under the Climate Change Act, so it seems a little odd that under the Bill, because we cannot easily determine what is within the budget of the local authority, the instrument has apparently no worth. I take the opposite view. Provided one states in a budget its parameters, the value of the budget then relates to its examination on the same terms over a period—it tells those involved where they are going, and does it properly at each level of governance. Indeed, it enjoins them to stick within it, but it does not constrain their policy options, because it does not mean they must do this, that or the other. It is not an imposition on local government to do particular things. It is a shaping arrangement that ensures that we have in common the ability to get carbon emissions down, while retaining an enormous amount of initiative in different aspects of our lives and in how we go about our business. It does not interfere with or bureaucratise policy making, as has sometimes been suggested.
Local authority carbon budgets could be an important element of what we do and what we have to do under climate change legislation. We have an opportunity today to make serious progress on what I think is a neglected element, perhaps, as my hon. Friend the Member for Ogmore suggested, by the Minister taking away the exact architecture of how this works.

Luciana Berger: I want to clarify what new clauses 1 and 2 would do. The council could make the case for not accepting the advice and could draw up a strategy based on a larger or a smaller scale of action. The difference is that the actions would be transparent and that local people could hold the council to account. Most importantly, no council would be able entirely to opt out of tackling climate change, as they can at present. To respond to the hon. Member for Richmond Park, there is an opportunity here for councils to put forward a smaller strategy for action—not that we would necessarily support that.

Alan Whitehead: I thank my hon. Friend for underlining the new clause’s impact on local authorities. In many ways, it goes in the same direction as budgets from the Committee on Climate Change. The Government recently accepted the fourth carbon budget, but not every element of the Committee’s recommendations. However, the climate change budget is in place—a good thing too—and that provides the shaping and the corset within which we then work through different policies, perhaps, depending on one’s point of view, towards that overall target.
The compatibility of what is in the new clauses with what we are already doing and know we have to do is of a high order. The new clauses make eminent common sense about where we should go. Over the next few years, if we are to deal with the imperative before us and get anywhere near our carbon abatement aims, we cannot avoid a degree of regulation and shaping, alongside best practice and examples of people far exceeding what the budget suggests. I hope that the provision will be the bedrock of a process of people exceeding the targets. It is not a particularly big ask, and it could be of great benefit to what we know we have to do to achieve our climate change targets in the years ahead.

Gregory Barker: It is a pleasure to see you in the Chair again, Mr Crausby, in what I am afraid is the Committee’s final sitting. This has been an important debate, and in the course of our discussions we have identified some slight differences of approach.
I am not against carbon budgets; in due course they might have a place. I supported the budgets before the general election and I continue to support the principle behind them, but we have to be clear about the volume of asks that we are making of local authorities at this particular point in time. We have looked at this matter through the wrong end of the telescope during this debate. We have been talking about the many local authorities that are doing phenomenal things. Only today, I heard that Birmingham intends to be a green deal provider in its own right. I am grateful to the hon. Member for Brighton, Pavilion who raised the excellent example of Kirklees council, which did some really pioneering things in conjunction with one of the energy companies. That is a model from which we have learned a lot at the Department of Energy and Climate Change. Extraordinary things are happening and we have heard about these exemplars. My concern for carbon budgets is not about the fact that they will be the icing on the cake for large metropolitan authorities, other go-ahead councils such as West Sussex or the impressive list that the hon. Member for Liverpool, Wavertree reeled off, and with which I totally concur—

Steve Brine: Winchester.

Gregory Barker: Exactly—or Stourbridge. There are a significant number of local authorities—we should not underestimate their number—that will struggle to fulfil their obligations under the green deal. The last thing that I want is to put another piece of legislation on to the statute book—one that becomes Home Energy Conservation Act 2. There is a real danger that we will overload local authorities with carbon complexity. The arguments advanced by my hon. Friend the Member for Richmond Park were right. More work needs to be done to come up with a robust consensus around what falls within a carbon budget and how it is determined.
Members were right to question what penalties would be incurred by local authorities if they failed to meet those carbon budgets. I want local authorities to focus not on carbon complexity or things that are outside their control—motorways running through a constituency, large industrial sites or worries about the impact that this will have on planning permissions—but on the dynamic role that they can play in rolling out the green deal and taking practical action. Perhaps this is the mirror image of previous Government practice, which was to set targets and obligations, then walk away from the responsibility of delivering them. I want to give local authorities maximum opportunity and capacity to deliver energy efficiency and to transform the housing stock and small businesses. That is the transformational genie within this Bill. If we introduce another layer of complexity, there could be problems. Although some local authorities may be able to adjust their existing plans, it could overload the very local authorities that the Bill is intended to help the most.

Simon Wright: The Minister said that he is not opposed to the principle of local carbon budgets. Will he assure supporters of local carbon budgets, including me, that if this amendment is withdrawn or voted down, it will not be the end of the matter as far as local carbon budgets are concerned? If we cannot deal with this matter in the Bill, will he leave the door ajar so that we can revisit the matter?

Gregory Barker: Absolutely. I was one of the few members of this Committee— I think that the hon. Member for Southampton, Test was also there—who served on the Climate Change Bill. I am in favour of budgets in principle, and in due course we will reach a point where carbon budgets can be rolled out for local authorities, but we need to do more.
There are practical matters to consider. It would impose a burden on local authorities, and burdens have to be costed. The Department does not have a budget to pay for it; we would have to cancel another project to roll it out, but we are intent on pushing the agenda forward. However, although we do not support the new clause, we do support low-carbon frameworks.

Caroline Lucas: I think that the Minister is misrepresenting our argument. He makes it sound as if somehow the sort of proposals that we want to bring in would be a distraction from the green deal, whereas they will help it to meet certain targets and aspirations. As it is, councils will say, “This green deal is all very well, but how much of it do we have to do and when do we have do it?” It does not help them very much.
In 2007, the Local Government Association said:
“Our unanimous view at present is that a statutory duty should be imposed on those councils that, within the next two years, do not respond to climate change.”
That was back in 2007. Local councils want the help that such proposals would give them. It would not be a distraction or a burden, but a help.

Gregory Barker: The hon. Lady is right, and they are getting that in spades with a revitalised Home Energy Conservation Act. HECA is exactly that, a focused and clearly designated piece of legislation that imposes a legal obligation on local authorities to drive energy efficiency throughout their areas. In the short term, HECA is the means of delivering that. To add a further layer of carbon complexity, asking councils to consider industrial gases, transport and other things, could be quite baffling to under-resourced and overstretched local authority officers. It would be a distraction from the real opportunities of the green deal.

Zac Goldsmith: If the green deal can be made a runaway success only as a result of reviews, strategies and targets being imposed, with local authorities effectively required to engage in it, that reflects badly on it. The green deal ought to be attractive enough to individuals, streets, businesses and local authorities to become a runaway success without compulsion being necessary. Will the Minister reassure the Committee that it is attractive enough, and that the Treasury will continue to be lobbied to provide incentives along the lines mentioned, to ensure that it succeeds without people having to be put into an arm lock to accept it?

Gregory Barker: I assure my hon. Friend that the huge degree of stakeholder engagement, from the largest FTSE companies to organisations that represent the small entrepreneur, residents associations and community groups, shows that there is a real appetite to get going on the green deal. We should not have any undue concerns about that. We clearly need the right framework in place, however, and we need incentives.
This is an ongoing programme. At the beginning of the Committee stage, I often said that we should realise that the Bill is not the last word on the green deal. We are setting in train a two-decade programme that will run all the way to 2030. The number of homes involved is so large that it is mind-boggling. Ultimately, it will touch 26 million homes. I do not suggest that we have anticipated the way in which the market will react in the latter stages of this decade and into the 2020s, but I am sure that we will need to return to secondary or other legislation and financial incentives to drive the market further.

Steve Brine: Equally, the Bill, the green deal and the market that will be created will not be the last word in the Government’s ambitions for their carbon reduction programmes, nor for their overall carbon budgets. Including a new clause on the action that local authorities must take may be putting such provisions in the wrong place, but it is not the only part of the Government’s carbon-reduction strategy, is it?

Gregory Barker: No, the Government’s carbon reduction strategy spans not only this Department, but the Treasury, the Department for Transport, the Department for Communities and Local Government, the Department for Environment, Food and Rural Affairs, and the Department for Business, Innovation and Skills. Carbon reduction is a pan-Government, holistic programme, and this is one part of it.
I will return to carbon budgets and why we are taking steps in the right direction. To move this agenda forward and to move closer to the point where we can adopt a comprehensive approach to carbon budgets, we have provided £2.5 million for local carbon framework pilots in nine areas, involving some 30 local authorities. We will publish the lessons learned from those pilots later this year, for the benefit of all local authorities. In addition, we have agreed a groundbreaking memorandum of understanding between my Department and the Local Government Group, again providing a framework for local authorities to set their own levels of ambition on climate change through a new Nottingham declaration partnership.
I would hate members of the Committee to have the impression that we have set our face against carbon budgets. There is more work to be done, however, and we do not believe that an unfunded obligation imposed on local authorities, particularly on those who are least engaged in this agenda, is the right priority, as we want them to engage in the green deal through HECA. Once they have got to grips with the green deal and rolling out energy efficiency, and once we have collated more information from our local carbon frameworks, we will continue to push this agenda forward. The new clause is asking for too much, too soon.

Luciana Berger: A pilot took place last year, and we have evidence from nine councils. All in all, 40 councils are signed up and want this to go forward. The Minister mentioned the memorandum of understanding, but it provides no clarity on the scale of action. It is not comparable with what we are discussing today. The Minister has said that it is not the last word and that there is a 20-year plan but, ultimately, the time is now. These targets are too important. The reason and motivation for these new clauses is that we have put this into action. It is already happening in 40 councils across the country who are saying, “We can do this.” I do not accept what the Minister is saying, because we have already heard councils saying that they are doing it pretty effectively and that it has worked. We used the example of Manchester, where 100 organisations, businesses and local authorities are all working hand in hand.

Gregory Barker: There was a small pilot programme. We are building on that and we recognise the good work that was set in train by the previous Government. The new programme, to which we have committed £2.5 million, involves 30 local authorities. We are using the previous programme to inform further our thinking on this. Overall, however, we do not yet have a framework, let alone a funded framework.
The last thing I want, because it is so easy to come here full of enthusiasm and passion for this subject, is to put more and more on to the statute book. It is that same passion and those same good intentions that led to the creation of the Home Energy Conservation Act back in 1995, but because there were not the resources available to roll it out fully, because it was slightly ahead of its time and because it was out of kilter with other policy sets, it languished on the statute book. It was up to the coalition to rescue it.
The last thing that I want is to push the local carbon budget to a point where it is a universal obligation, but where only the faster moving councils pick it up and run with it and it becomes slightly discretionary; the currency of the local carbon budget would be slightly devalued. We are gradually moving towards that point, but it must be on the basis of a strong consensus. There must be funding, and people must feel that it is right. The measure must not be only for the early movers, the fast adopters and the big metropolitan authorities; we are talking about a statute that will impose an obligation on every single local authority, including a small rural district council with perhaps only a part-time officer working on it.

Nadhim Zahawi: I think the Minister’s point is that HECA is the mechanism that will, effectively, ensure that local authorities are focused on delivering the green deal. We all have ambitions to go further than that, but the Minister is right in saying that some councils, such as Stratford-on-Avon district council, are already resource-thin and finding life pretty difficult in the current economic climate. Such councils would struggle if we were to make it mandatory to go further on carbon reduction without first having been responsible enough to have costed that in. The Minister rightly makes the point that it would be highly irresponsible to accept the new clause, which would, in fact, damage what we all want to see: the success of the green deal.

Gregory Barker: My hon. Friend is spot on. At this point, the absolute priority of local authorities should be the green deal. They should be focused on rolling out practical actions, not diverting officer time to drawing up hypothetical carbon plans and grappling with very complex issues. They should not be diverting very scarce, often non-existent, resources into drawing up ambitious plans. I want real progress on the ground now.
When we are into the scheme, that will be the time to use experience in this agenda to translate into a wider, more ambitious programme. That approach is sensible and pragmatic. I understand the Opposition’s frustration, but our approach is more likely to yield dividends in the longer term than taking our fences too soon.

Huw Irranca-Davies: I am quite encouraged, because I think the Minister is on the Opposition’s side. He keeps saying, “We’re nearly there; it is almost time for this.” New pilots are running on top of the pilots that ran before, and he has referred the matter to the Committee on Climate Change. Why does the Minister not take the power or bring something back on Report and fashion his own way? The enthusiasm that he has referred to is, indeed, on these Benches; it was also on those Benches before the election—so just do it.

Gregory Barker: I am grateful for the hon. Gentleman’s beguiling encouragement. The fact is that we are not weeks or months away from the programme. I want local authorities to focus, over the next 12 months, on preparation for the green deal, and focus on rolling it out in the following 12 months. We are a little way from the aim—we are not so far away from it, but we need to take much more evidence. The last thing I want is to distract local authorities by making them start to think that they need to draw up complex local carbon plans and strategies when they should be focusing absolutely on rolling out the green deal and allocating the relatively scarce and pressured resource of officer time on preparing for it.
Once the green deal is under way, we will benefit from the programmes that we have set up and from the increasing best practice that we are seeing around the country of councils that are further ahead on the agenda. I hope that we will be able to martial that and perhaps return with a further contribution to this live debate.

Luciana Berger: I am delighted that councils will be preparing for the green deal. It is most important that they be ready to be green deal providers, or to work hand in hand with them and assessors, and so on. However, as we said in our earlier discussions, 30% of our emissions come from properties, be they household or commercial. It is great that councils can play a part in reducing that 30%. However, anything between 80% or, as the hon. Member for Richmond Park said, 100% of our emissions come from localities. It is that additional 50% that we want councils, through our amendment, to have a responsibility to do something about.

Gregory Barker: I think the hon. Lady is a little confused. Obviously, 100% of our emissions come from localities; I cannot think of a single area in the UK that is not covered by a local authority. By definition, unless they are in space, they have to come from within a local authority area. My hon. Friend the Member for Richmond Park made a key point: the hon. Member for Liverpool, Wavertree seeks to give local authorities the responsibility for emissions that are created within their area, despite the fact that they do not have the powers to control them. That is the difference.
There is a whole range of things outside the scope, remit and certainly the finances of local authorities, although, under the hon. Lady’s definition, local authorities are responsible for 100% of emissions in the UK. There is a definitional inexactitude. We must define what we really mean. This is a complex area. That is why I have spoken about carbon complexity. I particularly do not want the smaller, less well resourced local authorities wading into this issue unnecessarily, potentially at the risk of distracting them from making real progress and giving absolute 20:20 focus to preparations for the green deal. I think there is a way that we can advance the agenda, but seeking to rush this fence now would not be the sensible way forward.
We will continue to engage in our pilot programmes and work with local authorities, which are in a position to show leadership, and I salute, welcome and encourage them to go further. We will engage with Friends of the Earth, which has done a great deal to inform thinking around carbon budgets and push the agenda further forward. We will engage with my colleagues at the Cabinet Office and the Department for Communities and Local Government. This is not a dead subject. This is a live agenda that we will continue to return to and advance on, but we are not in a position—we need to be honest—to crack this one today. I hope, therefore, that members of the Committee will understand why I will resist the new clauses.

David Crausby: It is appropriate at this point to establish whether hon. Members intend to press the new clauses that are grouped with new clause 1 to a Division. Simon Wright?

Simon Wright: No.

David Crausby: Tessa Munt?

Tessa Munt: No.

David Crausby: Caroline Lucas?

Caroline Lucas: Yes.

David Crausby: Luciana Berger?

Luciana Berger: Are we going to conclude?

David Crausby: No. We are going to deal with new clauses 1 and 2 now. We will deal with the clauses in numerical order. We will not deal with new clauses 28, 29 and 46 from the point of view of voting now, but we will deal with new clauses 1 and 2.

Luciana Berger: May I respond to the Minister?

David Crausby: Yes.

Luciana Berger: It was very positive to hear the Minister say that he was not against carbon budgets and that he would like to see them in due course, although not just now. However, we are ambitious; we think that the time is now and that we should be doing everything that we possibly can. We had the pilot and it worked very successfully. That is why we think it should be extended and expanded across the country. On that basis, we are going to be ambitious and press new clauses 1 and 2 to a Division.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 11.

Question accordingly negatived.

David Anderson: On a point of order, Mr Crausby. May I clarify the position on new clause 46? I thought that I heard the hon. Member for Brighton, Pavilion say that she wanted to press the new clause to a vote and that you said it would not be discussed. Perhaps I am wrong.

David Crausby: Not at this point. We will consider the new clauses in numerical order and so the opportunity will be there later.

New Clause 2  - Climate change strategy for local authority areas

‘(1) Local authorities must develop and promote a climate change strategy for their local area.
(2) In preparing the strategy, local authorities must take into account any advice given by the Committee on Climate Change on local action to meet carbon budgets.
(3) In preparing the strategy, local authorities must consult with local residents, businesses, social enterprises and co-operatives and other institutions.
(4) Local authorities must publish and promote their local climate change strategy, publish an annual report on progress towards carrying out the strategy and engage with local citizens and community groups.
(5) The Secretary of State must work with local authorities and the Local Government Association (LGA) to assist them in producing and implementing their climate change strategies, taking into account any relevant advice from the Committee on Climate Change.’.—(Luciana Berger.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 11.

Question accordingly negatived.

New Clause 8  - Purpose of Part 1

‘(1) The principal purpose of Part 1 is to deliver energy savings from the building stock which will make commensurate contributions to—
(a) the achievement of the target contained in Section 1(1) of the Climate Change Act 2008 and the carbon budget set for each budgetary period under Part 1 of the Climate Change Act 2008; and
(b) the elimination of fuel poverty by the target date required by Section 2(2)(d) of the Warm Homes and Energy Conservation Act 2000.
(2) In performing functions under this Part the Secretary of State will have regard to—
(a) the principal purpose set out in subsection (1) above, and
(b) the recommendations from time to time of the Committee on Climate Change where these are adopted by the Secretary of State.’.—(Luciana Berger.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 11.

Question accordingly negatived.

New Clause 9  - Duty of the Secretary of State to improve energy efficiency

‘(1) The Secretary of State must prepare and publish a plan for achieving the principal purpose set out in section [Purpose of Part 1] in England.
(2) The plan must establish specific aims and describe the proposed means of achieving them together with methods for reporting on progress towards meeting them.
(3) In preparing the plan, the Secretary of State must take account of any plans produced under section 60(2) of the Climate Change (Scotland) Act 2009.
(4) Where an aim is designated under this section, the Secretary of State must take all reasonable steps to achieve the aim.
(5) The plan prepared under subsection (1) must be published no later than 12 months after the day on which this section comes into force.
(6) The Secretary of State must, as soon as reasonably practicable after publishing a plan under this section lay it before Parliament.
(7) The Secretary of State must, within one year of each order setting a carbon budget under section 8(1) of the Climate Change Act 2008, review the plan prepared and published under this section.
(8) Where, following a review under subsection (7), the Secretary of State varies the plan, he must, as soon as reasonably practicable after so doing, publish the plan as so varied.’.—(Luciana Berger.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 11.

Question accordingly negatived.

New Clause 10  - Annual report on progress

‘(1) Section 1 of the Sustainable Energy Act 2003 (annual reports towards sustainable energy aims) is amended as follows.
(2) In subsection (1) (sustainable energy report) after paragraph (e) insert “and (f) achieving the aims established by the plans produced under section [Duty of the Secretary of State to improve energy efficiency] of the Energy Act 2011 and section 60(2) of the Climate Change (Scotland) Act 2009”’.—(Luciana Berger.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 11.

Question accordingly negatived.

New Clause 18  - Carbon dioxide emissions performance standards for electricity generation

‘(1) The Secretary of State shall by regulation establish a carbon dioxide emissions performance standard of 300g/kWh as the maximum level of carbon dioxide that may be emitted per unit of output by all new, extended, or upgraded electricity generating stations with a capacity of 50 megawatts or more.
(2) In addition to the emissions performance standard required by subsection (1) the Secretary of State shall by regulation establish the maximum level of carbon dioxide that may be emitted per unit of output for all existing electricity generators of a capacity of 50 megawatts or more.
(3) The level of the emissions performance standard introduced pursuant to subsection (2) shall be set with a view to requiring, within a reasonable period of time, widespread deployment of technology, or other actions necessary to completely phase out unabated electricity generation from fossil fuels, on time scales consistent with the advice of the Committee on Climate Change.
(4) In establishing the level of the carbon dioxide emissions performance standards required by subsections (1) and (2) the Secretary of State shall obtain and take into account—
(a) the most up-to-date scientific knowledge about climate change;
(b) the advice of the Committee on Climate Change, particularly in relation to carbon budgets, medium- and long-term emission reduction targets, and future emissions from the electricity generating sector.
(5) Regulations made under this section—
(a) shall be made by statutory instrument;
(b) shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament.
(6) The regulations required by subsections (1) and (2) shall be laid before Parliament within six months from the date on which this Act is passed, with the emissions performance standard required by subsection (1) entering into force no later than 12 months from the date on which this Act is passed.’.

The intention of this amendment is to enable and require the Secretary of State to introduce carbon dioxide emissions performance standards to set the maximum amount of carbon dioxide emissions that may be emitted from individual electricity generating stations.—(Caroline Lucas.)

Brought up, and read the First time.

Caroline Lucas: I beg to move, That the clause be read a Second time.
The new clause would be an important step towards decarbonising the UK’s energy supply. I am taking the opportunity to propose the introduction of an emissions performance standard for the power sector, because it is unclear when the next chance will come. At the earliest, I understand that the Government do not expect a new Energy Bill to be presented before next spring and, as I have said on many previous occasions in Committee, the urgent need to tackle climate change does not allow for that kind of delay. By inserting the enabling powers for an EPS into the Bill, the Committee would allow the Government to set out detailed EPS measures in secondary legislation immediately before the outcome of the EMR, as opposed to having to wait for at least another year.
Before the general election, the Prime Minister and the Chancellor of the Exchequer promised that they would support an emissions performance standard, but it would restrict greenhouse gas from carbon gas plants to the level of a modern gas-powered power plant—about 300 to 400 grams of CO2 per kWh. Indeed, both coalition parties criticised the previous Government’s policies which aimed for a standard of 600 to 700 grams of CO2 per kWh. I was surprised therefore to find proposals for a standard of 600 grams of CO2 per kWh in the recent consultation on electricity market reform. The Select Committee on Energy and Climate Change recently argued that, in order to be worth while, the EPS level needs to be much higher, stating that the Government
“should either abandon its half-baked Emissions Performance Standard proposals or replace them with a much tighter option, with a long-term trajectory for tightening the standard progressively over time.”
It is extremely important, if we are to minimise greenhouse gas emissions from fossil fuel power generation, to place a strong emissions performance standard at the centre of the Government’s proposals for reforming and decarbonising the UK’s electricity market. That is why I want an EPS of 300 grams of CO2 per kWh to apply to all new and modified power plants of over 50 MW within 12 months of the Energy Bill being enacted. The WWF, the Royal Society for the Protection of Birds, Greenpeace, Christian Aid and Friends of the Earth all support this approach, which would prevent the building of unabated coal-fired power stations while ensuring that new gas plants would require heat recovery, and hence a more strategic and appropriate siting closer to demand centres.
The Government’s EPS proposals are much too weak, and will have limited impact in producing the decarbonised electricity market that they should be aiming for. Many observers have described them as being merely a backstop. For example, I am greatly concerned that the Government’s proposed EPS levels fail to ensure that the maximum power will be extracted from each unit of coal and gas through the inclusion of combined heat and power in all fossil fuel energy plants. A stronger EPS, as set out in the new clause, should form part of a formal decarbonisation objective for the power sector by 2030. Such an objective would help to provide a clear sense of direction for the electricity market framework and ensure that the framework as a whole is focused on delivering a low-carbon power sector during the next 20 years or so. It would also ensure that investments are directed towards the lowest carbon forms of electricity generation by providing regulatory certainty.
Experts in the field have made it clear that an EPS is the only mechanism that can guarantee that only the least carbon-intensive forms of electricity generation will be allowed to be built in the UK. Without the EPS that I propose in the new clause, there is a risk that the UK will be locked into the use of highly carbon-intensive forms of electricity. The standards proposed under the Government’s electricity market reform mean that carbon capture and storage will need to be fitted only to a limited amount of capacity in a new coal-fired power station, which means both that new coal plants could still be built with a significant amount of unabated emissions, and that gas plants will continue to be built completely unabated for the foreseeable future.
By contrast, a strong EPS would require the retrofitting of CCS technology on existing unabated coal and gas plants by a particular date, thus sending a clear and early signal to stimulate the CCS supply chain in the UK. Given that coal plants have an operational life of up to 40 years or more, and that gas plants have an expected operational life of 25 years or more, it is clear that a strong EPS is needed if policy is to remain consistent with the decarbonisation trajectory called for by the Committee on Climate Change in the fourth carbon budget.
In addition, introducing a tight EPS structured to deliver a substantial decarbonisation of the power sector by 2030 would send a strong signal to the international community about the UK’s unequivocal commitment to tapping its own emissions of greenhouse gases. If it does not introduce a co-mechanism such as a tight EPS, the UK would miss the opportunity of substantially reinforcing its negotiating influence at international climate talks. While there would, of course, be some costs related to introducing a strong EPS, the Government’s own impact assessment of their electricity market reform proposals suggests that there would also be significant savings. For example, even under a weaker EPS, the UK power sector would have to buy fewer European Union emissions trading scheme allowances, saving about £11.8 billion, and the running costs per power plant—fuel, for example—could be about £7.7 million lower. There would also be air quality benefits, which some have estimated at between £500 million and £1 billion.
In conclusion, by failing sufficiently to limit the emissions allowed from electricity generation, the Government risk not only locking the UK into carbon-intensive energy generation for the foreseeable future, but dangerously limiting the attractiveness of low and dearer carbon power alternatives.

Huw Irranca-Davies: It is great to serve under your stewardship this afternoon, Mr Crausby, as we head into the closing part of our discussions. I welcome the intention of the new clause tabled by the hon. Member for Brighton, Pavilion, and I also share some of her worries—to which I shall return in a moment. However, I wish to express a strong word of caution. According to my reading of the new clause, it sets out not only a firm direction of travel in decarbonisation, but the specifics through a detailed EPS right here, right now under the Bill. The hon. Lady has explained eloquently why she considers that that is not only rational, but appropriate. I wish to explain why we need to apply a little caution right here, right now, and that is related to recent history.
The Government were wrong to rush ahead of their wider EMR reforms by announcing the carbon floor price in the Budget. Carbon floor prices are usually a signal, but that announcement did several things in a “cart before horse” way. It put the Treasury clearly in control of an agenda that should be driven by DECC through the Government and assisted by the Treasury, not the other way round. The carbon floor price has now set the context in which all other measures will be framed and judged by industry and others, including the fear of duplication of measures and the overloading of certain industry sectors with unnecessary costs and complexity; and, of course, as has often been remarked, the windfall that this has created for both the nuclear industry and the existing renewables industry.
On the latter point, the Government still have the opportunity to rescue the windfall in such tight, stringent financial times—of which we keep being reminded—and target it effectively, if they want to, at energy-efficiency and demand reduction in energy-intensive industries. That is why I want to add a word of caution about adding another item outside the whole package in one go. We have done it wrong already, and we now need to bring forward a package as an entity.
We firmly believe that the Government should have presented the elements of the EMR together as a package, under the leadership of DECC. The Minister should have explained the interrelationships between the elements and how he will balance the different measures; it should not be done in a piecemeal fashion. We would apply the same logic to the EPS, the detail of which would best be dealt with together with the whole of the EMR, albeit with the proviso that one of the most significant elements has already been laid out. I suspect that the summer and autumn will be a time for lively debate and for fashioning consensus out of areas of agreement and disagreement, including the calibration of the EPS and other measures in the EMR.
The new clause does not, as described in the very good and detailed supporting brief from Greenpeace and others, constitute what is termed an enabling clause that would allow the detail to be thrashed out later; it puts forward a detailed, prescriptive and precise level for the EPS that, far from enabling, is disabling of any further debate in the light of other mechanisms in the EMR. If it were an enabling clause, we might see more potential in supporting it to produce the fine detail, but we will go into the autumn with the 40 or 50 other pieces of secondary legislation in the Bill and the EMR, so we will be busy.
We agree with the principle of an EPS—it is important to put that clearly on the record—and the spirit of the new clause that, with other measures, will ensure that the setting of the EPS drives us with real determination towards a low-carbon future. We do not believe that the Bill is the right place to repeat the lesson of the carbon floor price and to glue another piece of the jigsaw immovably in place, separate from the other pieces, so that we can unstick them only by returning to primary legislation.
It is worth restating that Labour members of the Committee support an EPS. We will have the opportunity to introduce real detail into the package when the next energy Bill is brought forward. The detail in the new clause may be appropriate in that context, and I recognise the coalescence around the precise positions set out in the new clause of the many organisations cited by the hon. Member for Brighton, Pavilion, including Friends of the Earth, WWF, the RSPB, Greenpeace and Christian Aid. However, that needs to be done in context and not set out in another measure on its own.
While we recognise the need, in the transition to a low-carbon future, for carbon sources—including gas, hopefully with CCS, at the earliest opportunity, as we discussed in a previous debate—the new clause gives us the opportunity to ask the Minister how he will avoid the UK being drawn inadvertently into a high-carbon electricity system by default. Month by month and year by year, he will come under increasing pressure to consent to more and more higher-performing but traditional unabated gas power stations before the EMR is fully in place.
What monitoring is the Minister doing of the growth in megawatt capacity of consents both now, and of what he can see coming down the line? Will he be willing to decline consents if, as was mentioned by the hon. Member for Brighton, Pavilion, there is a fear of being locked into a high-carbon future and he determines that there is a risk of that happening? If so, at what point will that take place? What forecast of the expansion of new gas generation does he anticipate, and has he assessed whether that forecast is still compatible with the transition to a low-carbon future?
As the Minister will know, we recognise that we need gas as part of the transition to where we should go. But the question is: how far and how fast should that be, and how do we avoid getting locked inadvertently into what might be a high-carbon future, simply because of the pressure or because other things do not happen in time—be they CCS, nuclear, grid connectivity, the round 3 renewables take-off or any of those “what if?” scenarios? At what point will he say that we cannot rush headlong down the road of unabated gas or, for that matter, coal?
If the actual limit was not set in the new clause, could the Minister accept it as a true enabling clause, thus allowing the levels to be debated in full and set in secondary legislation, or is it his intention to set the fine detail in the next energy Bill? If the former, he could bring forward a wider enabling clause on Report. If the latter, could he indicate his thinking on the appropriate calibration, and whether the levels described in the detailed provision are completely out of line, or broadly in line, with a scenario he can envisage?

Charles Hendry: It is a pleasure to serve under your chairmanship, Mr Crausby, in our final session. The Government have made clear their absolute commitment to introduce an emissions performance standard, and to set it in law. We were the first party to commit to an emissions performance standard. We have consulted on the measure, further demonstrating that commitment. We propose that the emissions performance standard should act as a regulatory backstop regarding the amount of carbon that new fossil-fuel power stations are allowed to emit, ensuring that new coal provides the UK with security of supply consistent with our carbon targets.
The EPS should also provide regulatory certainty. It must not deter the investment in capacity we need over the coming years to keep the lights on, and it should support our ambitious plans on carbon capture and storage, which has yet to be demonstrated at commercial scale. Set at the right level, an emissions performance standard can be a real driver for new investment, but if set at the wrong level it will stifle the investment we need to see.
As the hon. Member for Ogmore has said, this should also be seen as one of a range of measures. It needs to be seen alongside the other measures in the market reform package. The hon. Gentleman mentioned the carbon floor price, which is a tax measure, so it is right that the Treasury lead on that matter. That measure starts in 2013, and it is important to give longer-term clarity ahead of other measures starting in about 2017. It was right for the Treasury to set that out, in order to give industry clear confidence at an early stage. That is why the two aspects have been separated. On all other measures within the electricity market reform process, the Department of Energy and Climate Change is clearly leading and developing policies.

Huw Irranca-Davies: If, as the Minister says, the measure needs to be taken then, will he consider advocating that the Treasury ensure that, in these stringent times and as a general principle, we target any windfall? It was described as a measure to incentivise new low carbon, not to reward existing low carbon. Will he argue to the Treasury that we should find a way to identify the amount of windfall, and to target that at the energy-intensive industries with which he is in discussion as a result of that measure?

Charles Hendry: I know the hon. Gentleman has an inevitable desire to tax anything he sees moving. We do not share that view. We believe it is right to try to give investors confidence. One reason for the time scale we have set is that it gives clarity. Had we said that we would introduce the measure in 2017, with an election coming along in 2015, people would have said, “Well, we will have to wait and see. We cannot make commercial decisions based on what one Government say they expect their successors to do.”
By introducing the measure in 2013, we have given a much greater degree of investor confidence. Alongside that, we recognise that there are other consequences on high-energy users. That is why we are working with the Department for Business, Innovation and Skills and the Treasury to ensure we address those concerns. Having seen the effect in Germany, we would not be tempted down the path of simply putting a windfall tax on the renewable or nuclear industry.

Huw Irranca-Davies: Does the Minister accept that in effect, we have a windfall tax on the taxpayer in order to fund existing renewables and nuclear? That was not the intention of the carbon price floor. The measure has been poorly designed. I am advocating not a new tax but getting back the money we have just thrown away.

Charles Hendry: I wish the hon. Gentleman success in selling that to the renewables industry—that he expects it to pay extra taxes at a time when it says it is not getting sufficient support from any of the technologies it wishes to see developed. We take a different view. We have set out a perspective on how to give certainty to investors over the longer term. That is going to be an important part of the process in future.
The issue we must deal with is the need for a significant amount of new investment in our electricity system. The words “barefaced cheek” came to mind when I listened to the Opposition spokesman, because we are trying to make up for an incredible lack of investment in our energy infrastructure over a long period. Over the course of this decade, we have to secure twice as much investment as we secured in the last decade—when the last Government were in power—every single year in order to give us energy security and keep the lights on.
This is an incredible challenge. Had we not been almost at the bottom of the European league table for renewables—above just Malta and Luxembourg—and if we had had more investment in renewables, that challenge would not have been so big. Had we not had the five-year moratorium on nuclear under the hon. Gentleman’s Government, we would have been five years further forward on new low-carbon nuclear technology. The investment that is necessary was knocked back because of decisions that were made, and that gives us a much greater mountain to climb now.

Huw Irranca-Davies: I do not want to delay the Committee, but first, we put the groundwork in place that is now leading to the round 2 and round 3 expansion. Secondly, why in the past year have we slipped from fifth to 13th in the global ranking of attractiveness for investment in renewables? That is under the coalition government, in one year. What has happened?

Charles Hendry: When a process of market reform is being undertaken, as we are doing and which the hon. Gentleman and his party said was not necessary when they were in government, that inevitably creates market uncertainty. We are looking at all the areas of uncertainty to give clarity. Because of the urgency—we are losing a third of our coal plant in the next five years and much of the rest by the end of the decade, and we are losing all of our nuclear except for Sizewell B by 2023—we must do much more to bring forward investment. Nuclear will take, at best, 10 years; the development of offshore wind will happen towards the end of this decade; the development of carbon capture and storage on a commercial scale will take to the end of this decade and into the 2020s; the development of renewable technologies like wave and tidal will come in the 2020s. We have a looming energy gap towards the end of this decade, for which the Labour Government were directly responsible, so we are going to need new investment in gas to give this country the energy security it needs. Gas needs to be a more important part in the mix, and we recognised in our “Pathways to 2050” that the role played by gas will be greater than the hon. Gentleman envisaged.

Sitting suspended for a Division in the House.

On resuming—

Charles Hendry: Before the Division, I was explaining that the appalling legacy that we inherited requires a tremendous amount of new investment in our infrastructure, on an unprecedented scale.

David Anderson: The Minister will be amazed to hear that I agree with quite a lot of what he says, but he surely must take cognisance of the fact that the last Tory Government did away with the cleanest, most technically advanced coal industry in the world. If our coal industry had been sustained and carried forward, we would not have the current problems with security of supply.

Charles Hendry: We completely agree that there is a very important long-term role for coal, although we could debate at great length why the coal industry went into decline and the problems of security of supply. Our coal supply became unreliable at the same time as gas became more greatly available; the combination of those two factors brought about a dramatic switch from coal to gas. That is one reason why we were better able to meet some of our Kyoto commitments than most countries.
The hon. Member for Ogmore asked whether I would be willing to consent gas plant without question. At present, there are no set rules on that, but we have said under the national policy statements that the Minister can take a view on whether the downside of consenting additional plant is sufficiently great to overturn a planning recommendation. Those issues can be taken into account, and we have clearly said that we will carefully monitor the growth, but we are not in that situation at the moment.
In the main, it comes down to company decisions and whether the company wishes to make the investment. In making such decisions, companies will take close account of the market structures that we are putting in place, which are designed to incentivise the investment in low-carbon technologies. The proposed contracts for difference and the carbon support price are designed to encourage people to invest in low-carbon technologies and give a clear signal to investors. It is against that background that the proposal for emissions performance standards within our market reform proposals should be considered. The EPS should support our commitment to decarbonisation and also provide sufficient certainty to make the UK an attractive place in which to invest.
We need new gas plant to be built as we make the transition to a low-carbon electricity system, so we must ensure that investors have sufficient confidence and certainty to build these plants. That is one of the reasons why we consulted on levels equivalent to 450 grams per kWh and 600 grams per kWh, which are above the emissions of a new gas plant. Those two very different perspectives were offered so that industry could let its views be known on which it thought would stifle or stimulate investment, and to ensure that we heard from the environmental groups about their concerns.
Introducing an emissions performance standard now at 300 grams per kWh would require plant to take measures that could prove to be both impractical and uneconomic, and would be likely to make investment in gas unattractive; that in turn would be detrimental to the security of the UK’s electricity supply. The Government are already taking action on measures such as efficiency in generation and the use of biogas. It would also be a hammer blow to the long-term viability of the British coal industry, which the hon. Member for Wansbeck raised this morning and which the hon. Member for Blaydon mentioned just now. Any sense that coal was being taken off the agenda for the future would make it much more difficult to sustain the viability of the pits that have remained open in this country. Before the summer recess, we will launch a White Paper that will set out the way forward on the package of electricity market reform measures, including the EPS.

Ian Lavery: The Committee on Climate Change has recommended on a number of occasions that new build gas-fired power stations after 2020 should be fitted with carbon capture and storage. Have the Government taken that on board and will that be done?

Charles Hendry: We will listen very carefully to the recommendations and will respond formally. Some of our responses to the Committee’s more recent advice will be forthcoming in the autumn. What we have said is that, like the CCC, we recognise that electricity generation needs to be decarbonised in 2030 and afterwards, so we need to take steps now to ensure that the investment that takes place understands and takes into account the need to decarbonise.
What we will also set out in the White Paper is how the EPS needs to evolve over time—the process in response to consultation on how it might be tightened, and the approach to grandfathering—so that people investing in gas now understand how that will happen and what will be expected of them in the future and so that there can be no doubt about the long-term environment. That will need to be tied in with our wider package of measures. The national policy statement will also be relevant to how we believe the electricity network needs to be decarbonised.
I agree with the hon. Member for Ogmore that to be as specific as the hon. Member for Brighton, Pavilion proposes in the new clause would deter investment. We do not have the luxury of a huge amount of surplus capacity on our side. We need to secure a great deal of new investment.
The hon. Gentleman asked whether we believe that this is a subject for enabling or detailed legislation. My instinct is towards more detailed legislation in due course, because I think that investors want the clarity of knowing that it has been enshrined in primary legislation. The sense that it is an enabling power, which in the run-up to every election there is pressure on ministers to tighten through a statutory instrument, does not give investors the secure investment scenario they need. The right way to go is to be as definite as we can be in primary legislation, but the approach the hon. Lady has set out is too tight. It would be damaging to investment, so I urge the Committee to resist the new clause.

Caroline Lucas: In response to the hon. Member for Ogmore, I do not follow his reasoning for opposing the amendment. I do not see the negative implications of agreeing an EPS now—on the contrary, I see many advantages. The key advantage is precisely the investor confidence that the Minister says he supports. I am very glad that he supports investor confidence. The Government have not demonstrated that strongly in the energy field—we need only to look at the FITs review to see that. If the Government do now care about investor confidence that is a very good thing. Setting an ambitious EPS now would send a clear message to investors that we are serious about this agenda, and it would help to shape the decisions being made now about the kind of energy mix that we will have in this country. I am glad to hear the Minister re-emphasise his commitment to an EPS in principle.

Charles Hendry: I agree with the hon. Lady that it would give clarity, but the consequence would be that investment which might come to Britain would go somewhere else. There is no doubt that the measure she proposes, with the tightness she suggests, would drive away investment in coal and gas and lead to an energy shortage towards the end of this decade. We need some of that investment to come here. If by clarity she means driving it away, we cannot agree with that.

Caroline Lucas: I do not mean driving all of that away, but I accept that there are some difficult questions to be answered. What the strict EPS would do is send the message that there is no role in this country for unabated coal. That is a bottom line if we are serious about climate change. We need then to work with the miners and others to make sure that there is transition and support for them into more sustainable industries, but the idea that in the 21st century we are going to see decades more of unabated coal—I stress unabated—is a fantasy. If the Government are serious about wanting green credentials, this will be a way of demonstrating it.

Ian Lavery: That we can reduce emission levels to 300 grams of CO2 per kWh as opposed to the suggested EPS of 650 grams of CO2 per kWh is pure fantasy. I am all in favour of looking at a policy of developing renewables, but to continue to attack the coal industry is unfair. The fantasy that we can get down to the levels the hon. Lady suggests will drive customers away and close British industry. We will then have to increase the net importation of energy, which in turn could result in huge carbon leakage between nations. The fantasy is reality as far as she is concerned, but I suggest she looks at the figures.

Caroline Lucas: It is not just me saying this. Several of the Government’s own pathways to a greener economy do not use nuclear or coal. There is no fantasy in saying that we need to shift to that kind of green economy. However, the unions and miners and people who are in unsustainable industries have to be part of shaping that whole process. The idea we can just put our head in the sand and pretend we can have business as usual is wrong.
If we had a tighter EPS, the message would not be that we are shedding jobs, but that that Britain is at the forefront of the green revolution—that we are at the forefront of wanting more combined heat and power, for example, and that we are being much more serious about decentralised energy and the whole energy efficiency agenda. We are talking about one aspect of that in the green deal, but the agenda is much greater than that. I do not want to take up the Committee’s time, but I disagree with the Minister’s interpretation. A strong EPS would be good for jobs, for the economy and for the environment.

David Crausby: Is it your intention to press the new clause to a Division?

Caroline Lucas: Given that I do not have the entire support of the Committee, I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 19  - Micro combined heat and power passive flue gas heat recovery devices

‘(1) The Secretary of State must within 12 months of the passing of this Act consider whether it is—
(a) viable;
(b) cost effective; and
(c) desirable
to require all new boilers installed in domestic properties to be—
(a) (i) micro combined heat and power units; and
(ii) to include passive flue gas heat recovery devices.
(2) In the section—
“micro combined heat and power” means a combined heat and power unit designed for residential properties or other small buildings;
“passive flue gas heat recovery devices” means technology that can use the waste heat from condensing boilers in order to heat water.’.—(Dr Whitehead.)

Brought up, and read the First time.

Alan Whitehead: I beg to move, That the clause be read a Second time.

David Crausby: With this it will be convenient to discuss the following: new clause 20—Advice on benefits of passive flue gas heat recovery systems (PFGHRS) —
‘(1) For the purpose of enabling him to assess the benefits of PFGHRS in dealing with fuel poverty the Secretary of State must request the advice of the bodies specified in subsection (2).
(2) The bodies referred to in subsection (1) are—
(a) the Energy Saving Trust;
(b) the Fuel Poverty Advisory Group; and
(c) the Building Research Establishment.
(3) A request for advice made pursuant to subsection (1) may also include a request for advice as to how PFGHRS can assist in combating climate change.
(4) The Climate Change Committee must within 12 months consider and produce a report on the ways in which PFGHRS can assist in dealing with climate change.
(5) In this section—
“PFGHRS” means technology that can use the waste heat from condensing boilers in order to heat water.’.
New clause 49—Reduction of Home Heating Costs: Warm Front—
‘(1) For the purpose of reducing home heating costs the Secretary of State must, through regulations made by Statutory Instrument, provide for the installation of passive flue gas heat recovery systems in any properties included in Warm Front in which new boilers are to be installed.
(2) In this section—
“Warm Front” means the Government’s policy for dealing with fuel poverty entitled Warm Front.
“passive flue gas heat recovery systems” means technology that can use the waste heat from condensing boilers in order to heat water.’

This New Clause seeks to ensure that passive flue gas heat recovery systems are included as part of any new boiler installed under the Warm Front programme.

Alan Whitehead: The new clauses would require the Secretary of State to consider and produce within 12 months reports on the effectiveness of installing on domestic premises new boilers that are micro-combined heat and power units including passive flue gas heat recovery devices or, as in my new clause 20, passive flue gas heat recovery systems—PFGHRS.
The new clauses make modest changes to the Bill—so modest that they hardly dare point their shrinking little fingers at the last time the building regulations were substantially revised to take account of changes in how boilers might be installed in UK households. The change to part L of the building regulations, which was undertaken on the watch of a Minister whose name escapes me for now, was quite revolutionary in the difference that a modest change could make to carbon containment over a period of time. The change was that if people were considering installing new boilers in their properties, they should normally install condensing rather than traditional boilers. Yes, the change in regulation shaped and directed, to an extent, in that it backed a particular technology, but within a few years the result of its implementation was that condensing boilers rose from 15% of installations in UK properties to 85%. Each boiler saved 1.5 tonnes of CO2-equivalent compared with its forebears. With 1.5 million boilers sold every year, this has been the single most effective measure for saving CO2 emissions ever passed in this House. That change alone saves some 0.4% of UK annual emissions per year.
After many years of, I think it fair to say, some false dawns in the development of microgeneration combined heat and power boilers for domestic installation, we could develop a mass market for such boilers. The change in emissions that would result from the installation of large numbers of such boilers—which heat the home, work efficiently and, with the conditions I mentioned, collect and recycle flue gases and produce electricity as a result—would be of a descending order similar to when part L was introduced in the early 2000s. There is a strong case for examining whether similar arrangements ought to be undertaken, so that such technologies could become widespread in UK homes, achieving a second generation of substantial carbon savings to follow what condensing boilers did only a little while ago.
Obviously, any such changes would need to be written carefully, as with the previous changes in building regulations, and for that reason the new clauses do not actually propose a change. They propose an examination of the change required and of how the new forms of boilers would work in conjunction with flue gas heat recovery devices to make the savings I have described. These are modest new clauses with enormous implications for a low-carbon domestic energy economy. I trust that the Minister will therefore jump with alacrity at the idea that they should be accepted.

Caroline Lucas: I fully support the new clauses and the hon. Gentleman’s sentiments. New clause 49, which I have tabled, differs from new clauses 19 and 20, in that it seeks to make the most of the end of the Warm Front programme as a way of kick-starting the use of passive flue gas heat recovery systems, so that the scale of production can be ramped up and the costs reduced. I understand that leading manufacturers have said that mass production of these systems could slash retail costs from the current £600 to as little as £100. When independent test results suggest an annual saving on household fuel bills of £80 a year, it is easy to see why the Minister said recently that it should be one of the products in the green deal, if it meets robust consumer and certification standards.
Even as Warm Front is being wound down, it will still install many thousands of new boilers over the next two years. The sooner these devices are fitted, the greater the benefits will be, both in terms of cutting the cost and from the perspective of reducing emissions. The recovery systems could also save water because they speed up the delivery of warm water to the hot tap, thereby reducing the amount of time that cold water is pushed through the pipes before the hot water starts to come through.
I have one final point regarding the inclusion of specific technologies through energy efficiency programmes. I was contacted recently by the Gas Safety Trust, which is concerned that, as homes become more energy-efficient, they will lose a certain amount of their natural ventilation. That could increase the risk of carbon monoxide poisoning, so the trust is calling for the mandatory inclusion of carbon monoxide alarms in all green deal packages. Given that the average cost of an audible battery alarm, which would last for about six or seven years, is only about £15, that could be a cost-effective way of protecting people’s living and working environments, and could reduce the costs to the Government of both fatal and low-level exposure to carbon monoxide. I hope the Minister will give serious consideration to that proposal.

Luciana Berger: I do not want to take up too much time, because I am conscious that we can expect another vote on the Health and Social Care Bill in the main Chamber. We support all three new clauses. New clauses 19 and 20 would be modest amendments, as my hon. Friend the Member for Southampton, Test has said. We would like the Government to look at how we can promote more energy-efficient measures, and would welcome a Government report on how passive flue gas heat recovery systems could assist in tackling climate change.
We would also like the Government to look at the merits of the proposal in new clause 49. At a time when fuel poverty levels are rising, we want to ensure that the Government, with the very limited resources they have available, make best use of what funding is left in the Warm Front funding pot over the next two years. It has been cut by two thirds, and we want to ensure that the Government are doing all they possibly can to meet the 2016 fuel poverty target.

Gregory Barker: New clauses 19 and 20 concern two technologies that, although in their infancy, have genuine potential to play a large role in driving efficient heating in the future. The technologies—micro-combined heat and power, and passive flue gas heat recovery systems—are different in application but have some things in common. Both have very low penetration of the market at present, low consumer awareness and, like many new technologies, can be rather costly. More than three years ago, I was renovating my house and putting in various green innovations, and I hoped to install a micro-CHP boiler. The technology, however, has not really come to fruition; it has been on the cusp of happening not for months but years, and we need to drive it forward.
I agree with the hon. Member for Southampton, Test and I share his frustration. We should do what we can to tackle the situation, and I fully empathise with the motives behind the new clauses. I should also make it clear that we already recognise the technologies in some of our support measures. Micro-CHP is supported under the feed-in tariff, and passive flue gas heat recovery systems technology—PFGHRS—could help its own cause enormously if it got a snappier name. We do not need to put that in the Bill, but I am sure it would be extremely helpful.
Micro-CHP is a new technology to the market, and domestic CHP units are the only non-renewable technology currently supported under the feed-in tariff as part of a pilot scheme. Many of us hoped that with the increase in biogas in the grid and the use of other low-carbon alternatives to ordinary gas, CHP could play a much more important role, not only as a low-carbon technology but ultimately as a zero-carbon one. The inclusion of the units in the pilot will be assessed as part of a comprehensive review that will consider all aspects of the scheme, including tariff levels, administration and eligibility of technologies.
The industry tells us that there are probably fewer than 1,000 micro-CHP units installed in the whole country—that is obviously why I did not get mine. That is in stark contrast to the 20 million gas boilers. I set those figures out not to be discouraging but to explain the scale of the challenge we face.
Tomorrow, the Department of Energy and Climate Change will publish its long-awaited microgeneration strategy. It focuses on tackling non-financial barriers to microgeneration—such as skills, technology, and information and advice—in the context of the financial incentives that we are putting in place: the feed-in tariff, the renewable heat incentive and, of course, the green deal. The strategy has commensurate ambition behind it.
I recognise that domestic heating requirements vary widely from situation to situation, and that a range of technologies will be needed to meet each situation in the most cost-effective manner. At present, I fear that it would be wrong to mandate the use of a particular technology if an alternative could deliver the same carbon savings more cost-effectively. We will, however, continue to monitor technological innovation across all technologies, including, among others, micro-CHP, passive flue gas heat recovery systems, heat pumps and solar. There is potential particularly for the first two of those systems, and we will genuinely keep them under review.
I share the desire expressed by the hon. Member for Southampton, Test to see micro-CHP and PFGHRS develop alongside the other more mainstream technologies, but for that to happen effectively we need to establish the long-term potential of the growth of the technologies in the market. As such, I propose to discuss new clause 19 further with Members and invite them to talk about it with my officials. I intend to come back on Report with further details on how we will progress those two technologies, and on the course of action we propose in order to deliver that enhanced level of ambition.
On new clauses 20 and 49, I intend to have discussions with the organisations concerned to establish a meaningful dialogue and a much greater sense of ambition and momentum in pressing forward with the development of PFGHRS—including the move towards a snappier name.
I wish to say a few words about the important point that the hon. Member for Brighton, Pavilion made about carbon monoxide, because cases involving it can be a matter of life and death. Considerable work has already been done, following a commitment made by my noble Friend Lord Marland in the other place. I have met the all-party gas safety group and a range of stakeholders to discuss their concerns in detail, and I am grateful for their help and expertise in assisting my officials and me in this matter. My officials then met industry stakeholders to think through potential solutions. As a result, we have decided to make clear requirements in the new green deal installer standards, which we are developing with the British standards institute. I have informed the group of my decision.
We think it unlikely that the green deal will affect carbon monoxide levels negatively; indeed, it will promote new boilers, which overall will help to reduce carbon monoxide emissions. Automatically fitting a carbon monoxide monitor to every building as necessary could add to the overall costs of a green deal package and could hinder the golden rule. Instead, we suggest requiring green deal installers to assess the carbon monoxide impact of their work—that will not be discretionary—and fit a monitor where deemed appropriate. They will also be obliged to check any existing monitors to ensure that they work adequately and have not passed their use-by date. In addition, the energy company obligation will be covered by the same standard.
I very much hope that assures the hon. Member for Brighton, Pavilion that we take carbon monoxide poisoning extremely seriously and that we are already engaged with the industry and will come forward with further details. I take on board fully the sense of direction, purpose, drive and ambition that the hon. Member for Southampton, Test seeks to inject into the technology agenda of micro-CHP and flue gas, and I assure him that although we are unable to accept the amendment, we are committed to finding other means to drive forward the technologies positively. On that basis, I urge him to consider withdrawing the motion.

Alan Whitehead: When people are withdrawing amendments, it is customary for them to say that they are encouraged by what the Minister says and will therefore withdraw their amendment, but I am genuinely encouraged by what the Minister has said. It is good to hear that work will be undertaken on the two technologies and how they can penetrate substantially more deeply into the market. I look forward to those discussions and examinations, and on that basis, I am happy to withdraw the new clause.

David Crausby: Do you intend not to press the new clause?

Alan Whitehead: Indeed.

David Crausby: Caroline Lucas?

Caroline Lucas: My comments would be along the lines of those of the hon. Gentleman. On the basis of the assurances given, I am happy not to press the new clause.

Alan Whitehead: I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 21  - Cost benefit assessment of energy saving and energy generating

‘(1) The Secretary of State must within 12 months of the passing of this Act publish an assessment (“the assessment”) of the costs and benefits of saving energy compared with those of generating energy.
(2) In this section saving energy includes measures to—
(a) reduce demand for energy;
(b) conserve energy; and
(c) use energy more efficiently.
(3) Before publishing the assessment the Secretary of State must consult—
(a) such bodies as in the Secretary of State’s opinion represent—
(i) the energy efficiency industry;
(ii) the energy generating industry; and
(iii) environmental interests; and
(b) such other persons as considered appropriate.
(4) The Secretary of State must take into account the assessment when making any estimates, projections or policies regarding the amount of energy that is required to be generated in order to satisfy the needs of the United Kingdom.’.— (Dr Whitehead.)

Brought up, and read the First time.

Alan Whitehead: I beg to move, That the clause be read a Second time.
I think everybody on the Committee acknowledges that energy saving is probably the cheapest and cleanest way of achieving our energy policy objectives. What is curious about that general agreement is that very little of the reality is examined in the comparison between saving energy and producing greater efficiencies generating it. There is no doubt where the Government stand on this particular issue.
One Minister of State has said that
“there is one overarching simple truth: the cheapest energy we all have to pay for is the energy we do not use”.
He went on to say that
“energy efficiency…is the most important and the best value-for-money consideration in terms of saving carbon.”—[Official Report, 30 June 2010; Vol. 512, c. 870 & 872.]

[Interruption.] Indeed, it was the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle, who, no doubt, has those quotes written out on little bits of paper in his wallet. He is absolutely right. That is increasingly an area that we need to analyse in greater depth not only because it is right in principle, but because of the projections we have in front of us on energy generation and energy capacity.
We have just discussed what we will need in new forms of energy generation over the next few years. The overarching national policy statement refers to the fact that a doubling, or even a tripling, of generation will be required by 2050. To my mind, that figure is very much based on the idea that energy efficiency only has a certain way to go as a component in the drive to decarbonise and produce far lower emission outcomes from our general energy economy.
On the contrary, the European Climate Foundation reported a short time ago that if we combine reduction in demand and measures such as the electrification of heating, around 90% of emissions from buildings can be removed. Indeed, just a little while ago, I saw the passive house concept in Germany, which effectively produces a minus zero-carbon home through various energy efficiency measures. There is an enormous way to go on that side of the equation for carbon emission reductions.
The new clause would essentially close the gap in the analysis of the relative merits of different strategies on low-carbon energy. No long-term assessment of the costs and benefits of energy saving compared with energy efficiency have ever been carried out by the Government. Although we are dealing with the sorts of figures and potential savings that I have suggested, we do not know—and there is no prospect in the near future—that we will know that information. The new clause would ensure that such an assessment is produced as a tool, which would rank alongside various other measures that have been introduced on carbon budgets things to regulate the overall approach that we subsequently take on energy. It would produce a fairly clear pointer to the hierarchy of measures that should be taken over the next period in energy saving and carbon reduction.
That is what the new clause would require the Secretary of State to do within 12 months of the Bill being enacted. That would be of enormous benefit to the in information in his statements and the overall direction of future energy policy. Of course, he could in theory take such an approach without legislation, and perhaps that would be a good idea. However, it would be an even better idea to have the provision on the statute book, because he could point to a reason why he has to do it when responding to voices suggesting that it should be put off for other purposes. That is the purpose of the new clause. I hope that if it is not accepted by the Government, the intent behind it can be agreed and that measures can be undertaken that give us a much better handle on the distinction between energy saving and energy generation and how that affects our pathways analysis and all the other things that go towards our targets.

Luciana Berger: I want to add a few points in support of my hon. Friend’s new clause. The chief scientific adviser at the Department of Energy and Climate Change’s, Dr David MacKay, who is charged with ensuring that the UK meets its 80% CO2 reduction target, was asked what he thought about the cost-benefit assessment of energy saving and energy generating. His response was unambiguous:
“I agree that this is a crucial comparison to make, and I’d love to see us develop a rational quantitative approach that incentivises energy saving in the same way, that, say, renewables are incentivised.”
During the Lords’ consideration of the Bill, Baroness Maddock moved a similar amendment on 19 January, requiring a crucial cost-benefit assessment to be carried out. Replying on behalf of the Government, Baroness Northover said that impact assessments of individual policies were sufficient. We think that that is not entirely accurate, because assessing the impact of individual policies is very different from properly quantifying the full potential of further energy-saving policies and then deciding on the level of energy demand that needs to be satisfied. We therefore have a situation where the full potential of the cheapest and cleanest method of achieving our energy policy objectives has never been fully explored.
Another measure that supports the new clause is early-day motion 644, which was tabled with cross-party support and calls for a cost-benefit assessment of energy demand. It now boasts more than 101 signatories, and on that basis we support the new clause.

Gregory Barker: I have a huge degree of sympathy with the spirit behind the new clause, although not quite as much as my father. He has been inventing and developing energy-efficient products for the past 20 years. In response to the recent spike in energy prices, he wrote in frustration to The Daily Telegraph to ask why everyone always ignores energy efficiency. Unfortunately, they did not publish his letter. He then wrote again, asking why they ignored him, but he is yet to have a reply.
It is a fact of life that energy efficiency is almost explicitly overlooked, because people rush to what are seen to be more technological but, invariably, capital-intensive solutions to the challenges we face. It is absolutely true that we need to do far more to drive forward energy efficiency.
As the hon. Member for Brighton, Pavilion said earlier in proceedings, the green deal is not the whole solution. We need to go further. In the electricity market reform proposals, which we will publish soon, and which will be taken forward in a further energy Bill, we will be dealing directly with further ways that we can incentivise whole market and whole economy approaches to energy efficiency and look at how we can come at energy efficiency from the opposite direction to the green deal. The green deal is a way of scaling up from the ground. In the EMR, we will be looking at how we can take large-scale responses and come the other way, as an alternative response to concerns about capacity—alternative to building new generating capacity.
Before we get to that legislation, I can assure hon. Members that we are already engaged with energy efficiency in the Department. The new ministerial team has pushed energy efficiency up the policy agenda. We will publish a report this autumn, which will provide an update on the progress towards meeting the first three carbon budgets and looking at the delivery of the fourth carbon budget. An essential part of that report will be the ambition and progress of our energy efficiency policies. The report will provide the type of whole-economy assessment that the new clause seeks to achieve.
The costs of particular technologies are assessed through extensive consultation with stakeholders. We are upping our level of engagement, and therefore another aim of the new clause is already being delivered and does not need legislative underpinning. We will be formally consulting on the green deal in the autumn, and I reassure the hon. Member for Southampton, Test that we are having extensive discussions outside the formal consultation process with the organisations to which the new clause refers. We have set up two green deal stakeholder forums specifically looking at the costs and benefits of a range of energy-efficiency measures and trying to quantify them with far greater accuracy. They are also exploring the options for promoting the appropriate sequencing of installations.
I appreciate that that probably does not go quite as far as the hon. Gentleman would like, but I assure him—and my father with his Eco-slab—that the Government are actually prioritising energy efficiency as never before. [Interruption.] The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden heckles me from a sedentary position, but I suppose that that was a bit of product placement on behalf of the old man. I pray for the Committee’s forgiveness. I assure the hon. Member for Southampton, Test that we are driving forward on a much more ambitious scale on energy efficiency policy formulation. We are not there yet. We welcome suggestions and constructive input into the debate, so that when we come forward with our final energy efficiency proposals, particularly in the EMR, we get the best that we can achieve. Accordingly, I would urge the hon. Gentleman to withdraw his new clause.

Alan Whitehead: On the subject of better names, I think that Eco-slab sounds a little like a heavy metal band and could perhaps be renamed. That is a tip for the Minister’s father, and I hope that it will be taken in the spirit that is intended.
I am encouraged by the Minister’s response, but not quite as encouraged as I was with the previous new clause. Nevertheless, I am sufficiently encouraged, so I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 22  - Display energy certificates

‘(1) The Secretary of State must within twelve months of the passing of this Act make regulations requiring all premises to which this section applies to display in a prominent place a Display Energy Certificate relating to the premises.
(2) In this section “Display Energy Certificate” has the meaning given in section 17 of the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.
(3) This section applies to all non-domestic premises of a size and type to be specified in the regulations.’.—(Zac Goldsmith.)

Brought up, and read the First time.

Zac Goldsmith: I beg to move, That the clause be read a Second time.
I will try to be brief, as we do not have that much longer. The intention of new clause 22 is to make it mandatory for all commercial buildings over a certain size to have display energy certificates. It is a simple enabling clause, giving the Secretary of State the power to initiate the roll-out of display energy certificates to the commercial sector. It would require all the relevant details of the phasing of the roll-out and so on to be dealt with in secondary legislation.
The motivation for the new clause is simple. If one does not know how much energy one is using, it is hard to know how to manage it. We have no idea how buildings up and down the country are performing, so mandatory A to G ratings are the crucial first step in helping businesses understand how to reduce their energy use. Display energy certificates are currently mandatory for public sector buildings of more than 1,000 square metres, but they are not compulsory in the commercial sector. It is worth pointing out that non-domestic buildings currently account for up to 17% of the UK’s carbon emissions. The carbon plan published in March this year already includes a commitment to extend display energy certificates to commercial buildings by October 2012, but to fulfil that commitment the Bill must be used to introduce the necessary enabling legislation, which would simply give the Secretary of State the power to extend display energy certificates through regulations.
I appreciate and understand the concern about the risk of costs and burdens being imposed on businesses by an extension of display energy certificates to the commercial sector, but if display energy certificates increase energy efficiency measures—there is mounting evidence that that is the case—the commercial sector will inevitably be making savings on their energy costs. I am pleased to say that the new clause has had the full support of, among others, the UK Green Building Council, the British Property Federation, the Association for the Conservation of Energy and, according to an e-mail I received a few minutes ago, even the CBI. From my endless discussions with the Minister, I know that he is also supportive of the principle behind the provision, and I very much hope he will support it. I look forward to hearing his remarks.

Caroline Lucas: I want to add my strong support to the new clause. I was pleased to see, as the hon. Member for Richmond Park has said, that there has been so much support from businesses and elsewhere for the proposal. An open letter was sent to the Prime Minister, the Deputy Prime Minister and the Secretary of State for Energy and Climate Change from the British Property Federation, the chief executive of Siemens, Marks and Spencer and others. Those are leaders of the private businesses that would be affected by the legislation. They stated that they were absolutely delighted when the Government’s carbon plan committed to extend the display energy certificates to commercial buildings by October 2012. That is absolutely right. Given that non-domestic buildings are responsible for up to 17% of the UK’s carbon emissions, the anomaly whereby display energy certificates are currently mandatory for public buildings of more than 1,000 square metres, but not mandatory for private-sector ones, is hard to justify.
Some people may feel that a voluntary approach is more appropriate, but I think it is interesting to look at the terms in which private property owners and the business leaders who signed the open letter speak. They state that
“a voluntary approach to take up in the private sector will not work, because without that level playing field there is a reputational risk for those businesses that voluntarily adopt certification and achieve poor ratings.”
They go on:
“We do not believe this will provide an undue burden on businesses of any size, as evidence demonstrates that savings resulting from the application of this scheme significantly outweigh any costs, from year one. Indeed, DECs for small businesses could be automated and even provided free of charge, based on existing energy bills.”
If the Committee does not mind, I will quote one more paragraph, because it is so strong:
“We believe that primary legislation is likely to be necessary to roll-out Display Energy Certificates to the private sector. Therefore, we urge you and your co-signatories to the Carbon Plan to lend your support to the use of the Energy Bill, currently before the House of Commons, as the vehicle for the necessary enabling legislation. We are concerned that if this opportunity is not taken, the deadline set out in the Carbon Plan is unlikely to be met.”
With such forceful and eloquent support for local movement in this area, I hope that the Minister will take it seriously.

Luciana Berger: Since the 2002 energy performance of buildings directive was introduced into UK law in 2007, there has been clear evidence that display energy certificates have driven substantial year-on-year improvements in energy ratings and reductions in energy costs in the public sector. This has happened because they are a strong reputational driver to improve energy performance and because of the financial incentive that comes from lower energy bills. We have heard about the breadth of support for such measures not just from green groups but from business, and I was delighted to hear that the CBI has come out in support of this too.
The energy savings and carbon reductions that could result are huge. Non-domestic buildings account for 17% of UK carbon emissions. In its report, “Building the Future Today”, the Carbon Trust reported that the carbon footprint of the country’s 1.8 million non-domestic buildings could be reduced by 35% by 2020 compared with 2005 levels, with a net benefit of £4 billion to £5 billion delivered to the UK economy through energy savings.
We are supportive of the measure because we believe it feeds into the wider debate about carbon reporting for business, something for which outside organisations such as the Aldersgate Group have been pressing. In Opposition, both coalition partners were pushing for mandatory carbon reporting as well as supporting display energy certificates, so it would be a big surprise if they did not support the measures today.

Gregory Barker: I pay tribute to my hon. Friend the Member for Richmond Park for driving the issue on to the agenda. It will be an important step forward in the energy efficiency of our public buildings, and I am indeed sympathetic to the proposal. Display energy certificates show how efficiently a building is being used, its actual energy use, its carbon emissions and its operational ratings. As the hon. Member for Brighton, Pavilion said, they are currently required in large buildings of more than 1,000 square meters that are occupied by a public authority or frequently visited by the public. The new clause seeks powers to enable regulations to extend the requirement for DECs to commercial buildings.
I recognise that DECs provide a very valuable tool to enable building occupiers to save money in carbon. In addition, they create a reputational incentive for action by businesses, because they broadcast the energy efficiency rating and energy usage of their buildings not only to their own employees, or the inhabitants of their buildings, but to customers and wider stakeholders. The certificates provide a consistent and robust way of collecting data on the energy use of buildings. If they are aligned with other policies, they have the potential to reduce the regulatory burden on business.
I, too, have been impressed by the strong appetite for extending DECs in the commercial sector from a wide range of industry leaders representing a large proportion of the sector, including, as has been said, the British Property Federation, British Land, Land Securities, Hammerson, Siemens, and Marks and Spencer. As a result of that, we have put in a lot of effort behind the scenes to take the thrust of my hon. Friend’s proposal on board. The wheels of Government have been turning. There is certainly strong support for the proposal in my Department, but we must get the drafting right and go through various clearances. We are making good progress with that process. I had hoped that we would be in a position to declare victory at this point in our proceedings; we are not quite there yet, but I am optimistic that I will be able to return with good news about progress on Report.

Luciana Berger: Which Departments support the amendment and which do not?

Gregory Barker: We are not anticipating any roadblocks, but, as the hon. Member for Ogmore will tell the hon. Lady, there is a governmental process to go through. We came to the proposal a little later than we should have done in DECC, and we are trying to get through the process as quickly as possible. Potential issues with drafting must be considered, but on the whole, I hope to return with more positive news on Report.

Luciana Berger: Will the Minister kindly clarify whether he will introduce a new amendment or just give us news at the next stage?

Gregory Barker: I hope to come back with some good news on Report. I might appear to tease a little—that is probably because I am trying to do so. I hope that there will be genuine progress, but obviously I cannot commit now, because if I did so, I would have already made a commitment, which I hope to do on Report. I hope that is clear. On that basis, I should be grateful if my hon. Friend the Member for Richmond Park would consider withdrawing his new clause, knowing that there is a head of steam behind it.

Zac Goldsmith: I thank the Minister for his comments. I know that he is absolutely behind the proposal. I have zero doubt that, by Report, he will be in a position to support it in a different form, but more or less in its entirety. On that basis, I beg to ask leave to withdraw the clause.

Hon. Members: No.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 7, Noes 11.

Question accordingly negatived.

Sitting suspended for a Division in the House.

On resuming—

New Clause 23  - Duty of Secretary of State to make regulations regarding the installation of energy efficiency measures by energy suppliers

‘(1) For the purposes of requiring energy suppliers to assist in combating fuel poverty by the reduction of home heating costs and to meet carbon dioxide reduction targets the Secretary of State must within twelve months of the passing of this Act make regulations establishing a scheme requiring energy suppliers to install specified energy efficiency measures in residential properties.
(2) Regulations made pursuant to this section must specify:
(a) the energy measures to be included;
(b) that priority for installation of those measures shall be given to the homes of persons living in fuel poverty;
(c) the carbon dioxide reduction target to be achieved as a result of those measures; and
(d) such other matters that are in the opinion of the Secretary of State required for the setting up and operation of the scheme.
(3) In this section:
“fuel poverty” has the same meaning as in the Warm Homes and Energy Conservation Act 2000.
“energy suppliers” means any person licensed to supply electricity pursuant to the Electricity Act 1989 and any person licensed to supply gas pursuant to the Gas Act 1986.’.—(Luciana Berger.)

Brought up, and read the First time.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 6, Noes 10.

Question accordingly negatived.

Gregory Barker: On a point of order, Mr Crausby. As we are nearing the end of our proceedings, I just want to update the Committee. I am pleased to report that following the debate last week on new clause 27, which was proposed by my hon. Friend the Member for Wells, I have consulted with my colleagues at the Department for Communities and Local Government. I am very happy to say that they will work with us to consult stakeholders on the important issue of retaliatory eviction, and to gather a much greater evidence base. We will ensure that that group includes a wide range of appropriate stakeholders—

David Crausby: Order. We have not yet dealt with new clauses 24, 25 and 26. Allow me to deal formally with those new clauses and then you can continue with that point of order.

Gregory Barker: I think I am done, Mr Crausby.

David Crausby: We understand that the hon. Member for Wells wishes to move new clause 24.

Tessa Munt: With clarification from the Minister that marketing property and capturing agents as well as landlords are matters for secondary legislation, and for serious consideration on Report, and that property—

David Crausby: Order. We cannot debate the new clause, which has already been discussed. You need to decide whether you want to press it.

Tessa Munt: I have had assurances from the Minister and I will not press new clause 24.

Gregory Barker: On a point of order, Mr Crausby. On new clause 27, I hope that the assurances that I have given the hon. Member for Wells regarding our commitment to wide-ranging stakeholder engagement on the issue will reassure her.

Tessa Munt: Given the assurances that I have received from the Minister, I will not press new clause 27.

David Crausby: We come now to new clause 31.

Caroline Lucas: On the understanding that if it is moved now—

David Crausby: Order. This is not an opportunity to make speeches on new clauses. It is simply a question of whether you wish to move the new clause.

Caroline Lucas: On a point of order, Mr Crausby. May I put it on the record that there is confusion? I was confused in the last vote, and I am confused as to whether pressing a proposal to a vote now means that we cannot table it on Report. Until I am clear about that, I do not know whether I want to press the new clause. I am sorry.

David Crausby: It is possible to move any provision on Report, but the politics are different, and that cannot be entirely explained by the Chair here. Technically, any provision may be moved on Report, but whether it is called is a matter for Mr Speaker. The hon. Lady will not obtain clarity on that question here, from me or anyone else. She will have to wait and see what happens on Report.

New Clause 40  - Support from the Green Investment Bank

‘(1) The Secretary of State must, within six months of this Bill receiving Royal Assent, report to Parliament with proposals on the ways in which the Green Investment Bank could maximise the take-up of the Green Deal.
(2) The report required by subsection (1) shall include an examination of the extent to which interest rates linked to the repayment of Green Deal loans can be lowered through action taken by the Green Investment Bank, and the impact this may have on consumer demand.’.

This New Clause would require the Secretary of State to produce a report on the ways in which the Green Investment Bank could support take-up of the Green Deal, in particular by taking action to lower the interest rates applied to Green Deal loans.—(Caroline Lucas.)

Brought up, and read the First time.

Caroline Lucas: I beg to move, That the clause be read a Second time.
I simply move the clause, as we need to get on to other matters.

Gregory Barker: This new clause seeks to introduce a reporting requirement on the role of the green investment bank within the green deal. Our position on the financing of the green deal remains that it is primarily a commercial matter, and that companies wishing to deliver the green deal should seek finance from commercial sources. We are not saying that blindly or just from a position of hope, but as a result of strong, detailed and proactive engagement with a wide range of stakeholders, particularly finance and investing institutions in the City, and large corporates with balance sheets that can take such financing.
However, we are aware of the arguments that the GIB could help to catalyse the provision of finance, so we are not blind to the potential role that it could play, however short-term and limited. The nature of that role is by no means clear, and neither is the need for it. There is a view that the green investment bank may be required a little later in the process when the debt is securitised from hundreds of thousands of householders and some liquidity is needed in the early stages of the new bond market. Those are all vague hypotheses.
We are getting strong signals from our detailed engagement with institutions that there is significant commercial appetite at competitive interest rates for green deal financing. We will, however, continue to engage both with companies seeking to be green deal providers and with the finance community to further define whether there could be, in either the short term or the longer term, a need for green investment bank involvement.
My right hon. Friend the Deputy Prime Minister has made it clear that we are open to discussions on the potential role of the green investment bank. It would not be helpful at this stage, however, to be forced into an artificial time scale, six months or otherwise, for making such a determination. Such a reporting requirement could in turn complicate the Government’s discussions with financing institutions. On that basis, we will not be supporting the new clause.

Caroline Lucas: I thank the Minister. I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 43  - Moratorium on offshore drilling in the Arctic and other fragile/hazardous environments

‘(1) All companies registered in the United Kingdom for the purposes of the Companies Act 2006, or currently engaged in offshore oil and gas exploration or production on the continental shelf of the United Kingdom, shall be subject to a moratorium on all offshore oil and gas activities in—
(a) the Arctic Circle;
(b) such environments as the Secretary of State shall deem appropriate, or
(c) such areas or regions as the Secretary of State shall deem appropriate.
(2) The Secretary of State shall, within six months of this Bill receiving Royal Assent, cause to be published a list of all environments, areas or regions to which this moratorium shall apply.
(3) This moratorium shall apply—
(a) until the Secretary of State is satisfied, on the basis of advice from an independent scientific commission, that such operations can be carried out without unreasonable risk to the environment; and
(b) for a period of no less than five years from this Bill receiving Royal Assent. —(Caroline Lucas.)

This New Clause would prohibit companies registered in the UK, or engaged in oil and gas activities in UK waters, from engaging in offshore oil and gas exploration in the Arctic Circle or other such areas as the Secretary of State feels is appropriate, for a minimum of five years.

Brought up, and read the First time.

Caroline Lucas: I beg to move, That the clause be read a Second time.

David Crausby: With this it will be convenient to discuss the following:
New clause 44—Publication and consultation on oil pollution emergency plans—
‘(1) Any person or persons submitting an Oil Pollution Emergency Plan, as required under the Offshore Installations (Emergency Pollution Control) Regulations 2002 and the Merchant Shipping (Oil Pollution and Preparedness, Response Co-operation Convention) Regulations 1998 shall at the same time make this plan available for public consultation, and comment.
(2) The Secretary of State shall, within six months of this Bill receiving Royal Assent, publish regulations detailing the procedure for public consultation and comment.
(3) The Department for Energy and Climate Change shall, upon approval of an Oil Pollution Emergency Plan, publish said plan and any relevant accompanying documents on their website.’.
New clause 45—Adherence to UK standards for oil and gas production and extraction—
‘(1) Any company registered in the United Kingdom, shall be required to demonstrate that in undertaking any offshore oil and gas exploration or production activity outside of UK territory it has met all the conditions and standards which would apply to such activity when undertaken lawfully on the UK continental shelf.’.
New clause 47—Review of shale gas in the UK—
‘(1) The Secretary of State must carry out a review of and prepare and publish a report on the shale gas industry in the UK, including—
(a) the carbon footprint of all shale gas operations, including hydraulic fracturing;
(b) an environmental impact assessment of shale gas operations;
(c) the steps taken by relevant Government Departments to prepare for shale gas operations;
(d) the steps taken by local authorities to prepare for shale gas operations;
(e) the steps taken by the Environment Agency to prepare for shale gas operations;
(f) the steps taken by the Health and Safety Executive to prepare for shale gas operations;
(g) the possible contribution of shale gas operations to UK energy security and affordability;
(h) the possible contribution of shale gas operations to UK decarbonisation policies.
(2) The report must be published within three months of this Act receiving Royal Assent.
(3) The Secretary of State must lay before Parliament a copy of the report.’.

Caroline Lucas: New clause 43 seeks a moratorium on drilling for oil or gas in the Arctic circle or other environmentally sensitive areas by companies registered in the UK or engaged in oil and gas activities in UK waters. The moratorium is designed to last for at least five years, and it would remain until such time as the Secretary of State is satisfied, on the basis of evidence from an independent scientific commission, that such operations would be safe.
The hon. Members for Liverpool, Wavertree and for Ogmore have tabled new clauses 44 and 45, which would ensure that oil pollution emergency plans are made available for public consultation and comment and would oblige companies registered in the UK to demonstrate that their offshore activities outside UK waters meet the same standards as those in UK waters. I welcome the amendments as an important step forward, and I particularly value the requirement to allow public access to oil spill plans. When it comes to oil and gas drilling in extremely environmentally sensitive areas such as the Arctic, however, I do not think any risk can be countenanced. Such habitats are simply too important to risk polluting them with a spill of any size.
Oil and gas exploration in the Arctic has gathered pace in recent years. Chevron, Exxon Mobil and Cairn Energy have secured drilling licences for the area, and Cairn Energy has already started drilling. Campaigners and experts believe that Cairn is unprepared for a spill from a rig in the Arctic. Cairn’s current response plans assume that the company will be able to drill a relief well in 37 days in the event of a problem, but the Norwegian authorities say that it will take around 50 days in the less remote and less extreme Barents sea.
Once the winter sea ice sets in and starts to thicken, all drilling becomes impossible in the Arctic. There are real fears, therefore, that oil from a blowout on a rig in the Arctic will reach the sea ice and become trapped underneath it for an extended period. Even as we speak, Greenpeace activists have been taking huge personal risks to block this reckless exploitation of an irreplaceable environment by boarding a Cairn rig to prevent it from drilling. On Friday, Greenpeace’s international executive director, Kumi Naidoo, was arrested by the Greenland Government as he boarded Cairn’s Leif Eriksson rig in the Arctic to hand the operators a 50,000-name petition demanding that they release their plans for responding to potential oil spills. Naidoo eloquently said:
“For me this is one of the defining environmental battles of our age, it’s a fight for sanity against the madness of a mindset that sees the melting of the Arctic sea ice as a good thing. As the ice retreats the oil companies want to send the rigs in and drill for the fossil fuels that got us into this mess in the first place. We have to stop them. It goes right to the heart”—

Proceedings interrupted (Programme Order, 7 June).

Gregory Barker: On a point of order, Mr Crausby. Before we bring the Committee’s proceedings to a close, may I put on record our appreciation of your chairmanship—

David Crausby: Order. That may be done only after our proceedings are concluded.
We have a lot to get through. If Members have not yet indicated whether they wish to move formally new clauses that they have tabled, I will ask them to confirm their intention. However, new clause 48, which has not been debated, and new clauses 43 to 45 and 47, which have been insufficiently debated, are not eligible to be put to a Division.

The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

New Clause 46  - Local carbon budgets

‘(1) The Secretary of State shall—
(a) within 12 months of this Bill receiving Royal Assent, report to Parliament with proposals for the introduction of a system of local carbon budgets consistent with meeting national Climate Change Act 2008 carbon budgets;
(b) introduce the local carbon budget system to begin at the start of the second national carbon budget period;
(c) report to Parliament annually about the contribution of local strategies to meeting UK Climate Change Act carbon budgets;
(d) determine circumstances in which two or more councils may develop a joint strategy for cutting greenhouse gas emissions in their areas.
(2) The Secretary of State shall request advice from the Committee on Climate Change about—
(a) the scale of action need in local authority areas to help meet UK Climate Change Act carbon budgets;
(b) climate mitigation and adaptation policies that are effective when locally coordinated by councils;
(c) ensuring that individual local carbon budgets are both appropriate for the circumstances of different local areas and that the totality of all local carbon budgets is consistent with the requirements of subsection (1)(a).
(3) The proposals to be reported under subsection (1) shall include a duty on local authorities to—
(a) develop a strategy, through consultation with those groups and individuals listed in subsection (3)(b), for cutting greenhouse gas emissions across their local area in line with meeting their local carbon budget;
(b) work in partnership with local residents, businesses and stakeholders, including social enterprises and co-operatives, community groups, schools and hospitals, and other institutions in drawing up and implementing the strategy detailed in (3)(a);
(c) wherever possible, develop proposals consistent with a reduction in greenhouse gas emissions in their local authority area of 90 per cent. by 2030, compared to 1990 emissions levels;
(d) publish and promote an annual report on progress towards meeting their local carbon budget; and
(e) request additional powers or financial support from the Secretary of State as they consider necessary to meet the duty set in section (2), which shall not be unreasonably withheld.
(4) Any regulations or order made under section (1) shall not be made unless a draft has been laid before, and approved by, resolution of each House of Parliament.’.—(

Brought up.

Question put, That the clause be added to the Bill.

The Committee divided: Ayes 7, Noes 11.

Question accordingly negatived.

Title

Amendments made: 76, in title,line7, after ‘infrastructure’, insert
‘and downstream gas processing facilities’.
Amendment 77, in title,line10, after ‘electricity;’, insert
‘about the security of nuclear construction sites;’.
Amendment 28, in title,line10, after ‘sites;’ insert
‘for an annual report on contribution to carbon emissions reduction targets; for action relating to the energy efficiency of residential accommodation in England;’.
Amendment 78, in title,line10, after ‘sites’, insert
‘and offshore infrastructure; for the use of pipelines for carbon capture and storage’.
Amendment 79, in title,line10, after ‘sites;’, insert
‘about renewable heat incentives in Northern Ireland;’.
Amendment 172, in title,line10, after ‘sites;’ insert
‘for the generation of electricity from renewable sources by a National Park authority or the Broads Authority;’.
Amendment 80, in title,line11, after ‘Authority;’, insert
‘for an amendment of section 137 of the Energy Act 2004;’.
Amendment 81, in title,line11, after third ‘the’, insert ‘amendment and’.—(Gregory Barker.)

Gregory Barker: On a point of order, Mr Crausby. I apologise for being a little premature earlier on, but I did want to place on record my appreciation—and also that of my colleagues—for your chairmanship and that of Mr Leigh, as well as for the considerable work and effort of your Clerks and my superb officials. We should not to forget the Doorkeepers, who have looked after us so well, and the Hansard reporters, who have tried to make head or tail of what we have been spouting.
I would like to put on record my real pleasure about the way in which we have conducted our affairs in Committee. We have not always been able to agree, but there has been a remarkable degree of consensus about the broad thrust of the Bill. I thank the Opposition for the way in which they have, by and large, engaged constructively in our proceedings. We have not been overburdened by experience of the ways of Committee proceedings, but nevertheless we have managed to navigate our way through, and I look forward to Report.

Luciana Berger: Further to that point of order, Mr Crausby. I also want to place on the record the appreciation of this side of the Committee for the fantastic way in which you and Mr Leigh have conducted our proceedings. This has been the first time that many of us, including the Whips and the Chairs, have served on a Public Bill Committee. In fact, this has been my first such Committee. Our proceedings have been collaborative and co-operative throughout our 10 sittings over the past two and a half weeks.
I would also like to thank Hansard and the Doorkeepers, who have helped us to pass our notes back, and I am grateful for the helpful way in which the Government have listened to many of the arguments made. We look forward to working with the Government on Report and Third Reading.

Bill, as amended, reported (Standing Order No. 83D(6)).

Committee rose.